NBN raises $2 billion from US debt markets

Company takes total debt raised since the start of the pandemic to AU$12 billion.

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An NBN FttN node getting a Nokia line card installed

Image: Corinne Reichert/ZDNet

The company responsible for the National Broadband Network (NBN) said on Tuesday it raised $2 billion from debt markets in the United States, consisting of $750 million from selling five-year bonds, and $1.25 billion in 10-year bonds.

The bonds will mature in May of 2026 and 2031, respectively.

"The proceeds will be used for general corporate purposes including the refinancing of NBN Co's Commonwealth loan and to fund future capex plans," the company said.

Since March 2020, the company has now raised AU$12 billion in new debt, with AU$1.6 billion from Australian five and 10-year bonds, and AU$8.5 billion from banks.

NBN has a AU$19.5 billion loan that is to be repaid to the federal government by 30 June 2024 through refinancing.

In December, the company said it raised AU$1.2 billion in five-year bonds at 1% interest from 55 investors.

Of the AU$6.1 billion in bank credit announced in May last year, AU$2 billion was slated to be used to complete the network, AU$1.5 billion flagged for working capital to "provide the company with added flexibility", and the remainder to be allocated for strategic investments with "positive return beyond the initial rollout phase" as well as repaying the government.

According to the incoming government brief prepared by the Department of Communications in 2019, the loan that NBN has with the government has an interest rate of 3.96%, with interest payments to hit AU$759 million in 2021-22.

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