14/07/2014 - 15:04

Norse bank opens Perth branch

14/07/2014 - 15:04

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Global investment bank Pareto Securities has opened its first office in Perth, with plans to supply bond finance to resources companies based in Australia.

Norse bank opens Perth branch
SET-UP: Director Adam Lucas (left) and chief executive Geir Lie have set up a Perth office of Nordic investment bank Pareto Securities. Photo: Attila Csaszar

Global investment bank Pareto Securities has opened its first office in Perth, with plans to supply bond finance to resources companies based in Australia.

The Oslo-based bank, which offers Pareto’s high-yield bond product to companies seeking finance, will initially focus on mining and oil and gas companies typically seeking between $100 million and $700 million.

Chief executive Geir Lie said the bank, which through its Singapore office advised Jaya Holdings during its acquisition by Mermaid Marine Australia, was interested in companies that had achieved early success and wanted to pursue growth.

“We typically work together with management to make sure we have a very good story on what they need the financing for,” Mr Lie said.

“Australian companies have not used bond financing as much as you would see in the US or in Europe as much, so we think there is an opportunity here in Australia.

“Just to increase that a little would make us very successful.”

Pareto has 15 offices across nine countries and this year has opened three offices – in Perth, Los Angeles and Aberdeen.

 “We had a banner year last year and this year has started even better raising capital of $US9.1 billion in six months,” Mr Lie said.

“We are probably low on Australian risk so I see a big opportunity to offer Australian type of risk into the international market.”

Established Pareto offices in other locations also offer merger and acquisition advice and target new investors such as superannuation funds, hedge funds, wholesale clients and high net worth individuals.

Mr Lie, who is also managing director, said Pareto planned to expand its Perth office into a full-service investment branch.

“We will succeed. I wouldn’t be down here if I didn’t think that,” he said.

“Singapore is a good example. Singapore started with two guys flying down from Norway in 2004 and today they are about 17 and have a full-scale operation with a sales force.”

Recent deals in which Pareto offices were involved include raising $275 million in bond issues for the TiZir joint venture between Mineral Deposits and Eramet, and advising Champion Iron Mines during its merger with Mamba Minerals.

Mr Lie said Pareto’s bond financing model had a distinct competitive offering.

“I think we have quite a unique product, it’s pretty flexible, it can be really tailor-made and we can offer a pretty fast process to access the money,” he said.

Mr Lie said high-yield bond placements could be completed in two months, partly because its bond product, while based around investor service Moody’s framework, did not require a public rating.

“(Investors) trust our story and view on the case. We use a lot of the same rating methodologies like Standard and Poor’s but we are thinking more like an equity investor. The story has to be strong enough to produce cash flows over the life of the bond and ensure the bond will be repaid,” he said.

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