Bank of Queensland’s $500 million fixed and floating rate domestic Government-guaranteed bond issue, launched yesterday, has been three times oversubscribed with the Bank accepting $750 million.
BOQ Managing Director David Liddy said today that the take-up reinforces the Bank’s credit standing in the debt markets.
“We have again demonstrated the strength of the BOQ credit standing in the debt markets with a three times oversubscribed term debt issue,” said Mr Liddy.
“We set out for $500 million and have had such a strong response that we have accepted $750 million.”
The term was over 3 years, maturing in October 2012.
“The pricing at +65 basis points is a big improvement from our January issue at +115 basis points, accompanied by a longer maturity term,” said Mr Liddy.
“However, the Government guarantee adds an additional 150 basis points to BOQ’s costs, whereas the majors are only charged 70 basis points, so it seems regionals are being charged twice for their lower credit rating. It really has created an unlevel playing field.
“We look forward to making a submission to the Senate Inquiry into the government guarantees and hope to see the pricing of the wholesale funding guarantee equalised for all authorised deposit-taking institutions shortly.”