Investing

National Australia Bank

Banks

National Australia Bank

Latest price

$ 109.22

  • ASX code
    YTMNA1
  • Maturity date
    16-Dec-2021
  • Capital structure
    Senior Unsecured
  • Coupon type
    FIXED
  • Coupon P.A
    4.00%
  • Issue Date
    16-Dec-2014
  • Next ex. distribution date
    07-Jun-2017
  • Next interest payment date
    16-Jun-2017
  • Payment frequency
    Semi-Annual

Issuer

National Australia Bank Limited (“NAB”)

Base Terms

Debt Issuance Programme dated 11 November 2003 and amended and restated as at 5 September 2014

Pricing Supplement

Dated 12 December 2014

Nature of the Bonds

Direct, unconditional,unsubordinated and unsecured obligations of NAB and will rank at least equally with all other unsecured and unsubordinated obligations of the Issuer, except liabilities mandatorily preferred by law. The bonds rank senior to NAB’s subordinated obligations, including all subordinated bonds.

Issue Size

A$ 300,000,000

Interest Rate

4.00% per annum, payable semi-annually (in two coupons of 2%) in arrears on 16 June and 16 December in each year, including the Maturity Date. 

Bond Denomination

A$1,000

Repayment at Par on the Maturity Date

On the Maturity Date, bondholders are scheduled to receive the Face Value and the final Coupon Payment for the last Interest Period.

Key Risks

The value of an investment in the bonds may fluctuate due to various factors, including investor perceptions, worldwide economic conditions, interest rates, debt market conditions and factors that may affect NAB’s financial performance. The following risks may also affect an investment in the bonds:

  • Liquidity Risk – An active secondary market in respect of the bonds may never be established or may be illiquid and this would adversely affect the value at which an investor could sell the bonds;
  • Interest Rate Risks – bondholders may suffer unforeseen losses due to fluctuations in interest rates;
  • Regulatory Risks – The banking industry in Australia is highly regulated, and regulatory changes may adversely impact affect NAB’s financial performance
  • Litigation Risks – Risks relating to litigation and regulatory actions;
  • Operational Risks – The risk of loss resulting from inadequate internal processes and controls, people and systems or from external events;
  • Default Risk – if an event of default occurs under the bonds, or NAB fails to perform any obligation in relation to the bonds, such event or failure may impact on the value of an investment in the bonds, the transferability of the bonds and the ability of a holder to recover amounts due under the bonds.

Key Benefits

Key benefits include:

  • interest paid semi-annually in arrears;
  • interest paid as 100% cash;
  • interest is not deferrable nor are interest payments discretionary;
  • rank equally with all other senior and unsecured creditors of the Issuer.

Early Redemption by Issuer

Yes, for tax reasons

Events of Default

Events of Default include:

  • Payment Default: Applicable with a 30 day cure period for interest payments and a 7 day cure period for principal payments;
  • Breach of other obligations: Applicable, with a 30 day cure period; 
  • Insolvency / Winding Up: Applicable; 
  • Enforcement against assets: Applicable, with a cure period of 60 days, and must materially prejudice the performance by NAB of its obligations under the bonds 
  • Enforcement of security: Applicable, with a cure period of 45 days, and must materially prejudice the performance by NAB of its obligations under the bonds
  • Cessation of business:  NAB ceases to carry on a banking business in the Commonwealth of Australia, or NAB’s authority under the Banking Act to carry on banking business in Australia is revoked. 

Climate (Green) Bonds

Certified as Climate Bonds under the Climate Bonds International Standards and Certification Scheme by the Climate Bonds Initiative.  

If the bonds cease to comply with the Climate Bond Standard, and the Issuer receives notice from the Climate Bonds Initiative, the Issuer will notify holders thereof.  This is not an event of default

NAB stated at the time it issued the bonds that it will use the proceeds to finance a pool of NAB’s loans in renewable energy (wind, solar).

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