BP turns to Australia for cash with £327m Kangaroo issue

BRITISH oil behemoth BP yesterday announced plans to sell Australian dollar bonds in a rare kangaroo issue.

Kangaroo bonds are Australian dollar bonds sold by international issuers. The bond marks the first time that BP has tapped the Australian market for funding.

The five-year issue was priced at A$500m (£327m) yesterday, with a coupon of 4.5 per cent.

The bond will offer a spread of 115 basis points above the Australian bank rate.

The offer, to be issued by BP Capital Markets, is the largest corporate kangaroo issue from an international borrower this year, according to bookrunner UBS. More than 75 per cent of the BP bonds were allocated to asset managers and insurance funds.

UBS and ANZ are joint bookrunners on the deal. Over recent months UBS has been the bookrunner for many European transactions, and yesterday also priced a £500m Centrica 32 year bond with a 4.25 per cent coupon.

ANZ this week priced a $600m (£379m) bond for Chinese online games and internet company Tencent Holdings.