Vodafone Makes Debut in Australian Debt Market with $265 Million Issue

Strategic Insights -

Vodafone made a significant entrance into the Australian debt market, issuing a $265 million 6.5-year fixed-rate Kangaroo bond in late July 2006. The telco's deal, led by Citigroup and Deutsche Bank, priced at 58 basis points over mid-swap, with a marketing range of 56-to-59 basis points. The issue was well-received by 13 investors, with Australian accounts accounting for 89% of the book.

Key Takeaways:

  • Vodafone's $265 million issue marked its debut in the Australian debt market, adding a "true" corporate name to the local credit curve.
  • The deal was led by Citigroup and Deutsche Bank, with Citigroup's expertise in debt capital markets contributing to its success.
  • The issue priced at 58 basis points over mid-swap, within the marketed range of 56-to-59 basis points.
  • The investor base for the issue was diverse, with 13 investors participating, including Australian accounts which made up 89% of the book.
  • Vodafone's attempt to issue a $1 billion five-year deal in 2002 was not successful, but the company's return to the Australian debt market in 2006 was met with positive reception.
  • The Comtex SmarTrend Alert system indicated an uptrend for VOD on July 28, 2006, signaling a positive performance for the stock.

Statistics:

  • The issue size was $265 million.
  • The deal priced at 58 basis points over mid-swap.
  • The marketing range was 56-to-59 basis points.
  • 13 investors participated in the issue.
  • Australian accounts accounted for 89% of the book.
  • The stock price of VOD on July 28, 2006, was $21.98.

Sources:

  • "Vodafone makes debt market debut." The Australian Financial Markets Newsletter - INSTO - ABIX via COMTEX (August 4, 2006)
  • "Comtex SmarTrend(R) Alert." Comtex News Network, Inc. (August 3, 2006)