NBN Co rejects Telstra plan to sell $5bn future revenue

NBN Co has refused to grant Telstra permission to sell $5 billion of its future NBN revenues to investors.

The refusal is likely to scuttle the telco’s plans to bring forward the revenue, which it had hoped to use to pay down debt and fund share buybacks.

Telstra has been testing the investor market on the plan since around June but has said it would need NBN Co and the government to sign off on the proposal.

It today said it had received advice that “technical consents from NBN Co will not be forthcoming”.

“Essentially we can’t see how NBN Co’s position can be protected/improved by Telstra’s securitisation plan, especially given the unpredictability of our operating environment in the 2020s,” NBN Co is said to have advised Telstra.

Regardless, Telstra said the process to date had “shown the value” of future payments to the carrier; some are contracted to last until 2045.

Telstra did not indicate whether it would continue with plans to reduce debt and buy back shares using some other funding means.