News
In the wake of a return to the Australian domestic market by Australia Pacific Airports Corporation (Melbourne Airport), the issuer says a positive response from international and domestic accounts provided renewed confidence in domestic capacity. Noting the relative scarcity value in corporate bonds, intermediaries agree that the outcome is encouraging. But they are not predicting a deluge of additional supply just yet.
Favourable execution conditions attracted ME back to the domestic residential mortgage-backed securities (RMBS) market, the issuer says. ME printed a total of A$1.5 billion (US$1.2 billion) from a A$1.9 billion final book across six-tranches in its first RMBS transaction of the year, according to arranger data. The A$1.4 billion class A1 notes priced at 118 basis points over one-month bank bill swap rate (BBSW).
The Australian Office of Financial Management (AOFM) has broken volume and duration records with its latest curve-extending syndication, highlighting significant global demand for longer-dated Australian dollar product. Issuer and intermediaries note the entrance of new investors as a positive take out from the transaction and say they are optimistic around the potential for further market development in the wake of the deal.
In the wake of Chorus's inaugural offshore deal in its new guise, the issuer says the scale provided by international markets was necessary to satisfy its funding requirements. While intermediaries acknowledge that European QE dynamics may have had some effect on demand, they say solid support for Chorus was also due to the issuer's own credit story.
In the wake of its twin-hit return to the Australian dollar market, Qantas Airways (Qantas) says its commitment to the improvement of its financial profile gave confidence to investors – which in turn added to the high level of demand the transactions garnered. The Asian bid was notably stronger than in Qantas's previous trades, lead managers reveal, while domestic investor support was "meaningful" despite some rating-specific mandate constraints.
Pepper Group (Pepper) included the longest-dated foreign-currency tranche in an Australian-origin residential mortgage-backed securities (RMBS) deal since the financial crisis in the deal it priced on October 6. The issuer and its arranger say doing so helped attract new global investors to Pepper, while the deal structure helped overcome the sometimes punitive cost of cross-currency swaps on securitisation deals.
Market participants say the Australian Office of Financial Management (AOFM)'s plan to extend its bond curve out to 2046, beyond its current longest maturity point of 2040, highlights the evolving maturity of the Australian market. The extension could attract new buyers into the AOFM curve and in turn bolster the wider market's trading capabilities and international relevance.
The extent of middle-market demand for AAI's recent tier-two offering took even the issuer and its lead managers somewhat by surprise, they tell KangaNews. AAI – Suncorp Group (Suncorp)'s wholly owned insurance subsidiary – capped volume on its most recent trade at A$330 million (US$251.6 million) although the deal was multiple times oversubscribed.
The comingling of retail and institutional investment pools that has helped drive a resurgence in New Zealand credit deal flow continues to support supply, say lead managers and issuers from the two most recent corporate deals. Issuance is also being backed by redemption flows and corporate borrowers taking the opportunity to diversity their funding.
In the wake of its annual results in August, ASB Bank (ASB) issued around A$1.3 billion (US$976.7 million) equivalent in the sterling and US dollar Reg S markets. Volume and tenor requirements drove market selection, the issuer reveals, while intermediaries insist the outcome of both deals illustrates calm global conditions and solid investor support for the bank.
Issuers and intermediaries say demand and liquidity dynamics have facilitated a pickup in benchmark-size supranational, sovereign and agency (SSA) mid-curve activity during July and August. Such deal flow is positive given market sentiment around smaller deal sizes and comes as investors place notably greater importance on liquidity in bond lines.
In the wake of two of the largest Australian residential mortgage-backed securities (RMBS) transactions of this year, both issuers attribute their success to post-Brexit market conditions and a dearth of high-quality securitisation supply in Australia. Notably, both transactions saw higher participation from real-money accounts than anticipated.