Australian gaming and wagering company Tatts Group Ltd is considering refinancing its A$700 million in bank debt with its existing lenders after tapping the U.S. private market in December, its chief financial officer said on Wednesday.
The company, which had A$911 million ($909 million) of bank loans maturing in June 2011, refinanced $225 million in the U.S. private placement market at the end of 2010, leaving around A$700 million outstanding.
We are contemplating an option of whether our banks wish to roll over the rest of the debt, Tatts chief financial officer Ray Gunston told Reuters Basis Point.
According to data from Thomson Reuters LPC, Tatts existing lenders are ANZ , BNP Paribas , Commonwealth Bank of Australia , National Australia Bank , Royal Bank of Scotland and Westpac Banking Corp .
There is ample liquidity in the bank market and banks are willing to lend for longer maturities for the right credit. This compared to during the financial crisis where borrowers struggled to get tenors beyond three years.
We are still working through our options. But it is my understanding five-year bank debt has become more available than previously, Gunston said.
The company is also keeping an eye on the fledging retail bond market as a funding option though, but sees it as pricey.
We have not taken (retail bonds) off the agenda, Gunston said. We are looking at where it fits into our profile. But it is still expensive and there are a number of issues.
The overall costs of retail bonds still remain quite high in Australia despite measures introduced last year to reduce lengthy prospectus documents and cut costs for small bond issues.
Tatts is not publicly rated but US debt investors estimate its ratings to stand between Standard & Poor's BBB-plus and BBB-minus.