Krone-denominated bond issues are quite common…in Norway and Denmark. In Australia, a corporate issuing bonds in the Norwegian version of the currency is quite unusual, although it has been known to happen from time to time. For instance, AusNet issued NOK900 million (AUD$160 million at the time) worth of June 2029s in mid-2014. However, one bond issue every two years does not a plethora make.
In any case, Transurban has announced it has priced NOK750 million ($117 million) worth of 2027 bonds via a private placement. Transurban said it would swap the proceeds into Australian dollars and then reduce existing bank debt. It also noted the transaction would further diversify its funding sources and currencies.
Whilst the buyer of the bonds has not been identified, market watchers have pointed to the Norwegian sovereign wealth fund – one of the largest in the world – as the obvious buyer.
Perhaps other Australian borrowers will see the attractions of issuing krone-denominated bonds. However, for the time being, the practice will still be seen as somewhat on the exotic side until other issuers give it their approval by issuing their own krone bonds.