News
In the wake of the first Australian domestic deal of a new year which has seen some of the best global credit issuance conditions for some time, Commonwealth Bank of Australia (CommBank) says all options are open for the majors in 2017 – despite selecting the domestic market for its own calendar-year opener. CommBank also notes the extent to which the major banks are growing in relevance on a global scale.
The decision by National Australia Bank (NAB) to launch and price a tier-two transaction early in the new year paid off, issuer and leads say, in the form of a tightly priced deal with greater than expected volume for an Australian dollar EMTN transaction. NAB printed A$275 million (US$204.6 million) of 15-year, non-call 10-year (15NC10) tier-two notes on January 11.
Issuers and arrangers of Australia's first major-bank benchmark issuance of 2016 say a well-established investor base across the US and Asia continues to provide appetite for Australian-origin deals. Following a heavy year of US dollar issuance from Australian banks in 2016 and with the new year off to a flying start, Australian banks are likely to continue to print substantial US dollar volume if investor preference remains unchanged – though they say issuance diversity will remain key.
S&P Global Ratings (S&P) stayed its hand on Australia's sovereign rating following the release of the Commonwealth's mid-year economic and fiscal outlook (MYEFO) on December 19. The rating agency maintains the negative outlook on Australia's triple-A rating, while both Moody's Investors Service (Moody's) and Fitch Ratings (Fitch) are retaining stable triple-A ratings on the Australia sovereign.
In the wake of its debut green transaction, Monash University (Monash) tells KangaNews the deal is a continuation of its commitment to developing an environmentally sound campus network. According to intermediaries, the US private placement (USPP) deal garnered more Australian dollar demand than usual for this format, including a major new investor.
In the wake of its return to public residential mortgage-backed securities (RMBS) issuance after a 12-year absence, ANZ Banking Group (ANZ) says the new shape of the regulatory matrix has finally made capital-relief issuance a cost-effective option. The issuer says it is encouraged by the investor response to its latest deal – including its substantial offshore distribution – and hopes not to be absent from the securitisation market for another extended period.
In the wake of Westpac Banking Corporation (Westpac)'s first-ever SEC-registered tier-two transaction, the issuer says as the first callable Basel III-compliant tier-two trade issued in the US market by an Australian bank, this will likely allow other Australian banks to follow. It will also enable them to issue in an efficient manner.
In the wake of its latest domestic syndication, South Australian Government Financing Authority (SAFA) (AA/Aa1) says the unconventional lead-manager arrangement it selected fulfilled an objective to stimulate a broader level of market conversation. According to the issuer, this method increased SAFA's exposure to potential new investors.
The Australian Prudential Regulation Authority (APRA) released the final draft version of the new prudential standard APS 120 – the regulatory framework for securitisation – on November 10, following industry consultation. Changes to the last draft are limited, and focus mainly on adding flexibility at the margin on capital deductions, funding-only securitisations and warehouse capital relief.
Following its return to the Australian commercial mortgage-backed securities (CMBS) market, Thinktank Commercial Property Finance (Thinktank) says expanding its investor reach beyond the scope of its first CMBS transaction proved fruitful. While the investor pool for CMBS is currently somewhat contained, Thinktank is hopeful comprehensive investor-relations work will further engage the wider securitisation community.
Japanese life insurers' demand for offshore bonds continues to grow, in particular these investors' increasing focus on credit product. An ANZ research note published on October 31 provides insights into the Japanese life sector's investment intentions – and the report's author says finding assets to fulfil this demand could be the biggest challenge for the Australian market.