Telstra pulls trigger on first Aussie bond raise under Vicki Brady’s watch.

Telstra is tapping the bond market, with a five-year senior bond that has so far drawn $1.1bn worth of demand.Picture: Luis Enrique Ascui/NCA NewsWire

Telstra is set to raise $650m for its first Australian bond raise in almost six years, with the five-year senior bond attracting at least $1.9bn of demand.

It is the first major Australian raise by Telstra since 2017, with Telstra launching a Euro bond in 2019.

The margin is 93 basis points above the bank bill swap rate, and DataRoom understands that the coupon is 4.9 per cent.

The raise is believed to be part of Telstra’s normal course of fundraising activities and will settle on March 8.

The transaction is expected to be rated A2 by Moody’s and A minus by S&P and joint lead managers on the deal were ANZ, CBA, NAB and Westpac.

Also tapping the bond market is the NAB, with a subordinated bond with $2bn worth of orders.

The bond is 2.3 per cent over the bank bill swap rate, with a 6.45 per cent fixed rates and a floating rate.

Telstra’s raising comes a few weeks after the telco increased its interim dividend by 6.3 per cent to 8.5c a share on the back of a 26 per cent jump in profit to $934m, driven by a strong set of mobile numbers.

Last month’s results were largely in line with expectations, with Telstra booking underlying earnings before interest, taxes, depreciation and amortisation of $3.86bn for the six months to December 31. It also reaffirmed its annual underlying earnings guidance of $7.8bn to $8bn.

The telco is set to lift mobile prices further in July as part of a yearly pricing ­review, and chief executive Vicki Brady flagged likely price rises to the company’s NBN plans as well.