BOQ Launches Four Year Debt Deal

Wednesday, 02/12/2009

Bank of Queensland today launched a four year debt deal of at least A$500 million which is expected to be priced at 50 basis points above the bank bill swap rate. 
BOQ will be applying to the RBA for this issue to be guaranteed under the Government Guarantee Scheme for Large Deposits and Wholesale Funding. 

The deal is expected to attract significant interest both domestically and off-shore. 

In announcing the deal, Managing Director David Liddy again called for a level playing field to be introduced for the government guarantee. 

“We are pleased to announce a four year government-guaranteed debt deal and are confident we will attract significant interest, however the downside is that we remain severely disadvantaged by the pricing structure of the guarantee,” said Mr Liddy. 

“In a marketplace in which super-banks like Westpac are increasing their rates above RBA to counteract the increased funding costs, the pressure being placed on regional banks is significant. 

“We have already lost a couple of regional banks in the Australian banking sector over the past eighteen months; surely the Australian government wants to ensure the remaining alternatives to the big four are able to remain competitive.  I would urge the Treasurer to act now in levelling the playing field on pricing of the guarantee so we can ensure a competitive banking environment. 

“At Bank of Queensland, we pride ourselves on being a real alternative to the big banks, and we will always ensure our pricing is competitive, but anti-competitive measures such as the guarantee pricing are definitely working against us.” 

Bank of Queensland is currently reviewing its variable home lending rates.