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Surging domestic demand enabled the Australian Office of Financial Management (AOFM) to ride out apparent reduced nonresident holdings of Australian Commonwealth government bonds (ACGBs) in its return to syndicated issuance. The debt-management agency printed A$11 billion (US$8.4 billion) in a new November 2028 nominal bond on 22 February, having printed A$9.3 billion of new 2021s barely a month earlier.

The Australian securitisation market received another boost on 24 February as Suncorp returned to residential mortgage-backed securities (RMBS) issuance with an upsized, oversubscribed deal. Apollo Series 2017-1 Trust (Apollo 2017-1) was a highly cost-competitive funding option, the issuer says, thanks in part to the capital relief generated by support from investors right down the deal structure.

Global events of  2016 have, among many other consequences, served to make Australia’s political environment look relatively stable by comparison. Australia may have developed a habit of changing prime ministers on a more regular basis than is strictly desirable – five times in less than a decade, only twice as the result of  elections – but political risk has never been high on investors’ checklists when it comes to Australia.

Westpac Banking Corporation (Westpac) says investor appetite for diverse product supported robust print volume in its first asset-backed securities (ABS) deal of the year. The transaction achieved record volume, assisted by the inclusion of a jumbo privately placed A2 tranche in an unusual approach that Westpac says is efficient for issuer and investors.

Australia’s latest domestic corporate issuer tells KangaNews that robust demand and solid momentum in the nonfinancial corporate space provided it with an unprecedented level of execution confidence. The recent trend for 10-year tenor and more competitive pricing further drives domestic appeal.

In the wake of the first Korean-origin Kangaroo transaction of 2017, The Export-Import Bank of Korea (Kexim’s) Seoul-based treasurer, Hee Sung Yoon, tells KangaNews greater domestic takeup of the deal is down to the issuer’s long-term engagement with the market. Kexim printed the A$500 million (US$383.7 million) deal on 7 February, in the first-ever three-tranche deal from a Korean credit in Australia.

Queensland Treasury Corporation (QTC) took a step towards becoming Australia’s second semi-government green-bond issuer on 15 February, as it disclosed that it has secured preissuance certification from the Climate Bonds Initiative (CBI). QTC says it plans to arrange investor meetings “in the coming weeks” to discuss a green-bond transaction.

Following the completion of the bookbuild of National Australia Bank (NAB)’s new tier-two deal – Australia’s first retail-targeted transaction for this asset class in three-and-a-half years – the deal’s arranger suggests there is a compelling reason for other issuers to consider a return to the listed arena.

The generally upbeat tone of most Australian dollar issuance sectors at the start of 2017 appears to extend to the securitisation market, according to the issuer and arranger of the first deal to price this year. Bank of Queensland (BOQ) doubled the size of the new residential mortgage-backed securities (RMBS) deal it issued on 9 February, to A$1 billion (US$763.7 million), having not issued a benchmark securitisation since September 2015.

AusNet Services (AusNet) accumulated final interest of A$800 million (US$609.8 million) for its A$425 million August 2027 domestic line printed on 7 February. This makes the deal the Australian market’s largest 10-year transaction for a corporate since 2007. The outcome was driven by growing domestic demand for 10-year paper and the issuer’s desire to price in line with its global curve.

Intermediaries say investor diversification continues to provide the Kauri market with appeal to global issuers, and despite some question marks over pricing appeal the market opened to a solid flow of activity in 2017. Kauri issuance typically tapers off in the second half of the calendar year, but market users are optimistic about 2017 due to a period of substantial redemptions.

In the wake of its largest syndication ever and with a marginally increased funding task following the Commonwealth mid-year economic and fiscal outlook (MYEFO), the Australian Office of Financial Management (AOFM) says Australian dollar market capacity is sufficient to meet its issuance requirement. The sovereign debt management agency is, however, adapting elements of its issuance strategy to cope with the volume it needs to issue.