Senior associate Lachlan Roots led the eighth global bond issue under the SMHL program, which closed on 28 September. The Freehills team also included Members Equity relationship partner, Peter Rowe, assisted by Fiona Williams, Ben Teh and Owen Terei.

Roots said in this instance the equivalent of $2.5 billion of notes were offered to investors in three tranches. One saw notes worth US$950 million ($1.2 billion) offered into the US market, the second saw 770 million euros ($1.2 billion) offered into the European market, with those Euro tranche notes listed on the Irish stock exchange. The third saw the Class B notes worth $45 million offered into Australia and parts of Asia.

An interesting aspect was the low level of pricing achieved on the various tranches. “On the US tranche, Members Equity achieved a margin of seven basis points over 90-day LIBOR and on the European tranche they achieved eight basis points over 90-day EURIBOR,” Roots said.

“That pricing is significant because it was achieved here on this Members Equity transaction. It has achieved pricing that is basically as good as what the four [major banks] get when they do this type of issue.” Roots said this was largely because the Australian paper that was being offered into the US and European markets was something investors were hungry for.

The transaction was heavily oversubscribed in both the US and Europe, which allowed the pricing to come down to those low levels, keeping both investors and the issuer happy.

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