Heritage issues $400 million Government guaranteed transaction
Australia’s largest building society today announced the successful placement of $400 million Government guaranteed notes into the wholesale debt markets. The transaction was Lead Managed by UBS and Westpac.
Heritage priced two tranches of floating rate notes, including $200 million of three year notes at 75 basis points over BBSW, and $200 million of five year notes at 85 basis points over BBSW.
This transaction is the first time that Heritage has issued a senior debt public deal into the wholesale domestic markets, and the first government guaranteed transaction undertaken by an Australian building society since the initiative was introduced in October 2008. The transaction was heavily oversubscribed by domestic and offshore investors.
Heritage CEO Mr John Minz said ”This is a significant milestone for Heritage as it represents the first transaction of this type undertaken by the Society and the first public wholesale markets deal completed by Heritage since 2006.”
“Access to wholesale markets has been challenging for some time, but the successful completion of this transaction demonstrates that the Society has strong support within the wider market. Expanding the wholesale markets franchise is a fundamental part of Heritage’s ongoing capital market strategy to diversify funding and compete as much as possible with the larger banks,” he said.
“Despite the disadvantages faced by smaller deposit-taking institutions, particularly as it relates to the wholesale funding government guarantee fee, Heritage continues to be a strong player within the financial services sector, offering a competitive pricing structure to its members.”
Mr Minz concluded confirming, “The proceeds from the $400 million transaction will be used to continue to provide the Society’s strong mortgage loan and personal finance proposition to members. As Australia’s largest building Society, Heritage will continue to put People first as we work hard to provide a superior alternative in the Australian banking and finance sector.”