Australian fertiliser and explosives group Incitec Pivot <IPL.AX>, metals recycler Sims Group <SGM.AX> and contractor Leighton Holdings Ltd <LEI.AX> are eyeing the U.S. private placement market, market sources said.

The sources said Royal Bank of Scotland may arrange the deal for Incitec. No-one at RBS’s Sydney office was immediately available to comment.

Incitec is already seeking a loan of around A$1.5 billion ($1.22 billion) to part finance its takeover of rival Dyno Nobel, Reuters Basis Point reported last week.

The U.S. private placement market is a popular source of funds for Australian companies looking for long-dated debt. Seven local companies have raised more than $1.6 billion there in 2008 and more are expected.

Bankers warn, however, a heavy deal pipeline in the next four weeks could delay some issues.

“The U.S. markets are very busy at this time and we could see a record level of issuance in terms of number of deals,” said a banker who asked not to be named.

“Maybe there will be too many coming at the same time and the weaker credits may give way to the stronger ones,” he added.

Typical buyers of private placements are U.S. insurance companies keen on long-dated paper to match their liabilities.

Since insurers tend to buy and hold the debt for the long term, it makes the placement market much less susceptible to the volatility that has racked other debt markets.

Commonwealth Bank of Australia <CBA.AX> may be involved in an issue for Sims, the world’s No.1 scrap recycling firm. CBA was not immediately available to comment.

Leighton Holdings is also in discussion with U.S. investors ahead of a bond offer to be jointly arranged by HSBC and Royal Bank of Scotland, the sources said. The banks were not available to comment.

The contractor is already seeking A$450 million in a three-year loan arranged by Australia & New Zealand Banking Corp, Commonwealth Bank of Australia and National Australia Bank, acording to Basis Point.

The loan pays 130 basis points over the bank bill benchmark called BBSY.

Origin Energy Ltd <ORG.AX>, which is fighting a hostile takeover bid, is due to roadshow in the U.S. later in September with Bank of America and Westpac Institutional Bank.

($1=1.226 Australian Dollar)

Source: http://www.afxnews.com

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