News
The Australian Office of Financial Management (AOFM) disclosed on 29 November that its next auction of residential mortgage-backed securities (RMBS) holdings will take place on 14 December. The auction will be for five lines of RMBS notes and a Westpac Institutional Bank (Westpac) research note says the cash value of the paper on offer is A$444.1 million (US$336.9 million).
The prominence of the residential sector within Australia’s economy and financial markets makes the mortgage a fascinating prospect for sustainable investment evolution. At the Australian Securitisation Forum’s annual conference on 21 November, two market participants closely connected with the development of the local sustainable debt market discussed the prospects for investable green mortgages.
Telstra Corporation (Telstra) printed its first Reg S-only deal in November. The transaction is the tightest ever issued by an Australian corporate in the US dollar Reg S market, leads say, and garnered solid Japanese take up.
The Australian Office of Financial Management (AOFM) completed what was by some distance its most successful divestment auction for its residential mortgage-backed securities (RMBS) portfolio on 23 November. The divestment programme fizzled out in late 2015 on the back of unspectacular demand, but the AOFM says a revised approach and positive market conditions enabled it to return with a superior auction outcome.
Australian green and social impact bond issuance has gained momentum throughout 2017 both domestically and offshore. On 16 November, Westpac Banking Corporation (Westpac) extended its green bond programme to the euro market, pricing a €500 million (US$591.6 million) transaction.
A trifecta of nonconforming residential mortgage-backed securities (RMBS) deals priced early in Q4 – from Bluestone Group (Bluestone), Pepper and Resimac – serve to illustrate the ongoing positive demand story for the Australian asset class.
Leads and issuer on Australia’s third-ever wholesale additional tier-one (AT1) deal and the first to write off rather than convert at point of nonviability (PoNV) – as printed by ME Bank on 16 November – say the transaction demonstrates the continued evolution of bank capital optimisation.
QBE priced a new additional tier-one (AT1) transaction on 10 November, printing US$400 million in a no-grow deal with a May 2025 first call date. In a first for the Australian market, the Reg S deal was issued in accordance with an issuer gender-equality framework. Paul Byrne, QBE’s Sydney-based group treasurer, estimates this approach may have doubled the volume of demand the transaction attracted.
In recent years, the London interbank offered rate (Libor) has faced increased scrutiny by market participants as well as regulatory authorities in the international financial markets. Leading US law firm Mayer Brown shares vital insights into how the future of Libor could affect Australian securitisers.
The Australian Office of Financial Management (AOFM) revealed on 8 November that it plans to resume selling down its remaining residential mortgage-backed securities (RMBS) portfolio, after putting the divestment process on hold in 2016. In the interim, capital repayments have seen the AOFM’s RMBS portfolio dwindle to less than A$1.7 billion of residual face value, according to its own data.
A growing segment of corporate Australasia is stepping up to the plate on sustainability, taking the lead among peers and in many cases government. The issues are complex, especially when it comes to transition management, but the wins are starting to stack up – including in the capital-markets arena.
A quartet of Kangaroo deals priced in October took New Zealand-origin supply in the Kangaroo market to a new annual record. Deal sources say the evolution of the Australian credit market – especially increased consistency of liquidity at the 10-year mark – should keep the trans-Tasman option on the agenda for a clutch of Kiwi corporates.