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Octus on Credit: US investors show continued interest in Australian financial services

Stephen Aldred, Managing Editor - APAC

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U.S. investors continue to show strong demand for Australian financial services credits — a tailwind for CC Capital as it lines up roughly AUD 2 billion ($1.31 billion) in USD- and AUD-denominated loans to fund its AUD 3.3 billion buyout of Insignia Financial. 

The AUD/USD dual-tranche structure has become the go-to formula for tapping deep U.S. liquidity. Sources say Insignia’s deal is being measured against KKR-backed Colonial First State, which successfully repriced its debt in July.

Colonial First and Insignia are not entirely correlated. The key differences are:

  • KKR has owned 55% of Colonial since 2020, giving it a more established sponsor track record.
  • CC Capital is a new face in Australia.
  • Insignia is a first-time leveraged borrower.

But the read-across is positive. Colonial tightened pricing on its $568 million loan by 75bps to SOFR+300bps, upsized to $618 million on U.S. demand, and shaved its AUD margin to BBSY+375bps.

With Ba2/BB- ratings on Colonial, sources expect Insignia to land in a similar ratings range — leaving U.S. accounts primed for another Australian wealth platform trade.

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