1. Funding Investments in Australia
Institutional Banking & Markets
Australian American Chamber of Commerce Houston
Energy Conference
Funding Investments in Australia
Scott Speedie
Global Head of Specialized Finance
Commonwealth Bank of Australia
January 2014
Strictly Private and Confidential

2. The Commonwealth Bank of Australia
Australia’s largest bank by market capitalisation
14.6m Customers
3,000
Institutional Clients
KEY FINANCIALS
CREDIT RATING
S&P Moody’s Fitch
Statutory NPAT
A$7,677m
Cash NPAT
A$7,819m
Return on equity
18.4%
Total assets
A$754b
Cash earnings per share
A$4.86
Dividend per share
A$3.64
Basel III CET1 (International)
11.0%
Industry specialisation and understanding make the Bank an ideal partner providing balance sheet strength and broad product capability
Oil & Gas industry teams placed in key commercial and financing hubs. CBA is a Bank that actively deploys balance sheet into our client’s businesses
Broad range of debt products spanning project, corporate and acquisition finance
Strong global financial markets capabilities across commodities, foreign currency and interest rates
The only domestic Australian bank with a full in-house equity business, focused on retail and institutional clients
LIQUIDITY (AUD)
GLOBAL COMPARISON
Market Capitalisation (US$bn)
Global Market Capitalisation Ranking
Senior Debt Rating
Moody’s
S&P
268.02 1 A2 A+
243.52 2 A3 A
232.44 4
Aa3
198.11 6
Baa2 A-
183.81 7
124.01 10
Aa2
AA-
104.29 15
92.91 18
Baa1
$101b
June 2011
$135b
June 2012
$137b
June 2013
Source: Bloomberg. As at 13 January Credit rating: S&P

3. Funding Options for Upstream Companies
Equity
Project Finance
Reserve-Based Lending
Balance Sheet Lending
Development Finance
Small Borrowing Base
Large Borrowing Base
Corporate Credit Facility
refinance
refinance
refinance
Large Portfolio of Producing Fields Development Assets plus Exploration Acreage
Several Producing Fields plus Permitted Development Assets
Few Producing Fields
Single Field Development
Exploration
Start-Up Development of an E&P Company Mature E&P
Funding Investments In Australia

4. Australian Equity Market
Where does Australia stand?
Market Capitalisation of Global E&P Stocks
Australian Secondary Issuances (A$bn)
Source: CBA and Bloomberg
Funding Investments In Australia

5. Australian Loan Markets
Australian Loan Market Volumes (A$bn)

6. LNG – Advent of Major Australian Energy Projects
7 LNG projects in Australia currently under construction – A$194bn total capex value
Australia benefits from geographic proximity to Asia
Ichthys LNG Project (A$42bn):
Largest project finance globally
Quality sponsors – Inpex (Japan) and Total (France)
A$20bn of debt – funded by export credit agencies and commercial banks
Forecast A$3.5bn p.a. contribution to GDP
Supported by long term take or pay LNG sales contracts into Asia
LNG prices are oil-linked
Funding Investments In Australia

7. Project Finance/Development Finance
Lending to complete a specific project
Repayment of debt from project cash flow
Security over borrower and assets
Lenders’ recourse is often limited to the project itself
Australia – 2nd largest market for project finance (after the United States) with 10% global share of project finance in 2013
Development project finance is common and characterised by
Extensive technical due diligence
P90 production profile
Guarantee from the sponsor
No dividends or asset sales
Restrictions on exploration expenditure
Funding Investments In Australia

8. Reserve Based Lending
The structure of choice of the independent sector – flexible, revolving credit facility
Reserves based lending for multiple fields
Requires diversification – no single asset must dominate portfolio
P50 reserves can be used for producing assets
Aggregate cash flows considered
Covenants and pricing are lower than for single-asset financing $
time
Facility size, with amortisation to zero
Declining value of Asset 1
Addition of new assets allows full utilisation of facility
Extension of availability
Funding Investments In Australia

9. Corporate Debt (A$’bn)
Balance Sheet Lending
Debt capacity linked to past performance
Debt covenants linked to balance sheet/ P&L rather than cash flow
Suited to larger independents
Fewer restrictions
Lower maintenance
Increased flexibility
Cheapest source of debt finance for the independent
Company
Corporate Debt (A$’bn)
Total Assets (A$’bn)
Market Cap (A$’bn)
4.3
24.8
31.4
3.7
17.0
13.8
2.9*
7.1
11.0
Source: Bloomberg, company annual reports
* Wholly comprised of Oil Search’s guarantee of its portion of debt associated with PNG LNG project; guarantee falls away on completion.

10. Australian Bond Markets
Significance of the A$ MTN market in a global context has grown since 2007
A$ MTN Monthly Issuance Volumes
Monthly Bond Redemptions
The A$ MTN market witnessed strong issuance activity in 2013, with total volume reaching A$97.2bn (2012: A$99.9bn). While SSAs and FIs have dominated issuance, consistent flows of corporate supply has been positively supported by investors.
The A$99bn of maturities over FY14 (FY13 A$72bn) is expected to drive continued support for primary issuance
Redemptions (A$bn)
A$ MTN Issuance by Industry
A$ MTN Issuance by Sector
Mining & Mining Services issuers raised A$2.3bn in the A$MTN market in 2013, accounting for 24% of total issuance (2012: 15%)
Corporate issuance remains under-represented in the A$ MTN market in The overall contribution to total market supplies has improved in recent years to 10.2% (2012: 9.6% and 2011: 5.6%) as issuers have taken advantage of the very favourable demand conditions
Source: CBA and Bloomberg as at 21 January 2014

11. Highlight Transactions

12. Client Coverage Group Project Finance Specialized Finance Grant Willis
Managing Director Natural Resources P: E:
85 Queen Victoria St, London EC4V4HA
Michael Thorpe
Managing Director
P: +61 (0) E:
201 Sussex Street Sydney 2000
Specialized Finance
Scott Speedie
Managing Director
P: +61 (0) E:
201 Sussex Street Sydney 2000
Andrew Loadsman
Executive Director Natural Resources
P: +61 (0) E:
201 Sussex Street Sydney 2000
Jon Verlander
Executive Director
P: E:
811 Main Street, Suite 4675, Houston, TX, USA
Jeff Heazlewood
Director Natural Resources
P: +61 (0) E:
201 Sussex Street Sydney 2000
Charles Davis
Executive Director
P: +61 (0) E:
201 Sussex Street Sydney 2000

13. This presentation does not constitute an offer to provide finance on any terms. The provision of any such offer is subject to formal review and credit approval, satisfactory due diligence, sign off by legal, tax, accounting and other professional advisers and execution of satisfactory documentation. The Commonwealth Bank shall not be bound unless and until final terms are agreed and formal documentation is signed. That final documentation may not necessarily mirror the contents of this presentation and any actions you may choose to take should not be taken in reliance on this presentation.
The information contained herein is confidential and is the proprietary structure of the Commonwealth Bank. It is provided on the basis that you will not disclose its contents to any persons other than directors, employees and advisors without the written consent of the Commonwealth Bank. It is not to be discussed either directly or indirectly with any other financier. This obligation will not apply if the information is available to the public generally (except as a result of a previous breach of this confidentiality obligation) or you are required to disclose it by law.
© Copyright Commonwealth Bank Australia