Australia Post is lining up an Australian dollar bond issue after mandating ANZ Banking Group and National Australia Bank to run a transaction.
The issuer is rated AA- by Standard & Poor's, two notches below, the sovereign AA credit rating, and in line with the major banks.
Earlier this week the rating agency expressed its confidence that Australia Post was managing the risks associated with its cost cutting programme, and was diversifying its earnings.
It removed its negative outlook "because we believe the increased standard letter price and shift to a two-speed delivery service have sustainably improved Australia Post's profitability".
Australia Post is one of the nation's largest employers with a workforce of 35,000, even after a recent downsizing.
"In our opinion, Australia Post's ongoing competitiveness relies on its ability to effectively manage its labor costs, productivity, and flexibility"
Australia Post is one of several AA rated borrowers that are tapping the bond market for funding.
Last week Australian Catholic University was assigned an Aa2 rating, presumably with an eye to entering funding markets.
Several universities have already raised debt with Monash believed to be eyeing a transaction, potentially in the US private debt market.
