National Australia Bank Expands into US Syndicated Loan Market with Conservative Strategy

Strategic Insights -

National Australia Bank has launched a team in New York to originate deals and build a capital markets business for the Americas, leveraging a $10 billion balance sheet. The bank's strategy focuses on nurturing existing relationships and building new ones, particularly with investment-grade international clients. Tom Hunersen, executive vice president and general manager of the bank's wholesale financial services group Americas, emphasized the conservative approach, citing a recent participation as a co-arranger in A-plus/A2-rated Homeside International Inc.'s $2 billion revolving credit facility. The bank's goal is to seek out value-added deals, such as structured financing for blue-chip companies, with opportunities arising due to consolidation in the US banking industry.

Key Takeaways:

  • National Australia Bank has launched a team in New York to compete in the syndicated loan market, with a focus on originating deals and building a capital markets business for the Americas.
  • The bank's strategy is to nurture existing relationships and build new ones, particularly with investment-grade international clients.
  • National Australia Bank's goal is to seek out value-added deals, such as structured financing for blue-chip companies, particularly in utility, telecom, consumer products, general manufacturing, infrastructures, media, and entertainment sectors.
  • The bank will not aggressively compete in the leveraged lending market against investment banks, instead focusing on low-margin investment-grade corporate financing.
  • Recruitment for the wholesale financial services group Americas will focus on hiring professionals with industry experience and client relationships.
  • The bank aims to form partnerships and alliances with top lead arrangers like Chase Manhattan, BankAmerica, and Citibank.

Statistics:

  • National Australia Bank's US balance sheet: $10 billion
  • Participation in A-plus/A2-rated Homeside International Inc.'s $2 billion revolving credit facility: $2 billion
  • Libor margin: 23 basis points.
  • Current size of wholesale financial services group Americas: 125 members; expected to expand to 150 members by the end of the year
  • Number of professionals expected to join the syndications team in the next few months: 2

Sources:

  • The original text (no publication date provided)