National Broadband Network operator NBN Co has secured $6.1 billion in debt finance on external markets as part of the companys inaugural long-term borrowing from private debt markets.

The new credit facilities each have a five-year term as the company looks to support its future financing needs after the Federal Government had flagged some time ago that it expected NBN Co to pursue debt financing through external markets, including in order to start the process of re-financing its loan with the Commonwealth.

Finance Minister Mathias Cormann said that the strong interest on private debt markets to support the future financing needs of NBN Co demonstrated that there was strong support in the market for the NBN business plan and outlook.

NBN Co approached the bank market with a request for an initial $2.0 billion, as foreshadowed in its 2020-23 Corporate Plan. Given the positive response from the market, NBN Co has secured additional lines of credit totalling $4.1 billion at very competitive prices, Senator Cormann said.

There is no requirement for NBN Co to draw down on these additional facilities immediately, but the Government agrees with the company that it makes sense to have these facilities in place, to give it flexibility and given current economic conditions.

Minister for Communications, Cyber Safety and the Arts, Paul Fletcher, said that NBN Co is at a pivotal point as it nears network build completion and prepares for its next phase of operations as a self-sustaining telecommunications wholesaler.

The company has entered into arrangements with a number of Australian and international banks to secure funding through private debt, complementing Commonwealth Government funding capped at $49 billion, Minister Fletcher said.

NBN Co is expected to draw down $2.0 billion from the $6.1 billion raised and complete the build within its $51 billion funding envelope, as set out in its 2020-23 Corporate Plan. The additional funding will provide the company opportunities to invest and create even more value for Australians guided by future Corporate Plans.

Analyse the systematic and unsystematic risk that NBN should consider.

Assess and discuss different capital financing (sales of assets, bonds and equity) to facilitate the acquisition of NBN.