February 17, 2015

Understanding the mindsets of US investors

The US Private Placement market offers a rich source of long-term funds for a wide range of Australian corporates. Our latest survey reveals the key factors that influence US investor buying decisions and their expectations for 2015.

While the US Private Placement market offers a rich source of long-term funds for a wide range of corporates, it’s also complex, deep and diverse market.

To help Australian businesses understand the mindsets of US investors so they can better navigate the market, we asked 25 US investors about the key factors expected to influence buying decisions in 2015 – including the types of borrowers that investors prefer, their risk appetite and their capacity.

The latest NAB US Private Placement Investor Survey covers 30 topics of interest for both issuers and investors. Key findings include:

  • Over 90% of investors expect to have a similar or increased risk appetite in 2015 compared to 2014.
  • 42% of investors are willing to fund in the non-US issuer’s home currency.
  • 43% of investors responded that their allocation on bids submitted was between 41-50%, with another 17% of investors responding that their allocation was between 26-40%.
  • Over 50% of investors surveyed responded that they could fund transactions that matured past 15 years if the issuer required it.

In conjunction with this report, NAB’s General Manager of Capital Finance in North America, Geoffrey Schmidt analysed the six fundamental attributes every company must possess to be successful in the US capital markets.

In his paper ‘Why US investors buy’, Schmidt specifically explores:

  • A company’s reasons for being
  • Rates of corporate evolution
  • Company management
  • Competitive advantage
  • Stability of a jurisdiction
  • Investor-by-investor specific constraints
  • Sector limitations
  • Country limitations
  • Operational limitations

For more details, download the complete documents.

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