News
The most recent issuer to price a residential mortgage-backed securities (RMBS) transaction in the Australian market reveals a wider investor base for its latest deal even than its jumbo transactions from 2014. Hints that 2015 volumes may exceed previous years may be supported by early-year issuance activity, the latest deal's lead manager says – but the true level of market capacity is yet to be tested.
A constructive tone in the Kauri market drew four supranational, sovereign and agency (SSA) issuers to place deals in January 2015. Deal volume added up to NZ$2.1 billion (US$1.6 billion) – a monthly record for the Kauri asset class – and market participants highlight encouraging demand trends behind the flow.
Analysts have started responding to the shock result in Queensland's January 31 election, which saw the standing Liberal-National government's massive majority wiped out in one swoop. They expect a clear market response to an expected change in policy direction, but see a less significant credit impact.
ANZ Banking Group (ANZ) opened the door to a new jurisdiction for tier-two issuance on January 21. The bank and its leads tell KangaNews about a pricing outcome which suggests this new issuance option might provide the best tier-two economics for Australian banks after their domestic market – and with volume which moves the dial on the total requirement.
In the first of a series of three articles exclusive to KangaNews online, Australian credit investors reveal their outlook for the local market in 2015. Investors lay out their views on demand, supply and the macro outlook as they relate to financial institution (FI) and corporate bond dynamics in the year ahead.
The Australian dollar market opened for business at the earliest opportunity in 2015 as a supportive basis swap facilitated a swathe of Kangaroo deals from supranational, sovereign and agency (SSA) borrowers. A marked upsurge in interest in SSA Kangaroos from a notable investor sector leads market participants to ponder the extent to which SSAs could substitute for potentially lower supply in other high-grade asset classes in 2015.
The latest half-year financial and economic review data show the New Zealand economy is moving from "rock star to rock solid" while Australia's budget targets are increasingly becoming a moving target, analysts say. The respective debt management offices are faced with accordingly divergent funding tasks.
KfW Bankengruppe (KfW), the Kangaroo market's largest issuer, is moving closer to bringing its "Green Bonds – made by KfW" programme to the Australian market. A funding update published by the agency on December 15 names Australian dollars as one of two currencies in which it is exploring offering green bonds in 2015.
Analysts believe new steps announced by the Australian Prudential Regulation Authority (APRA) as a means to "reinforce sound residential mortgage lending practices" represent a combined regulatory effort. Indeed, earlier this year the Reserve Bank of Australia (RBA) flagged its preference for macroprudential-type tools to be used, if at all, by the prudential supervisor rather than the reserve bank.
The development demand for green assets by Australian real-money funds allowed National Australia Bank (NAB) to achieve its goal of debuting as a green-bond issuer in the domestic market. As with Australia's only previous green-bond deal, NAB achieved investor diversity in its book at pricing in line with the issuer's outstanding, non-green bonds.
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Perceived uncertainties around the lenders' mortgage insurance (LMI) methodology deployed by Standard & Poor's Ratings Services (S&P) appear to have changed Australian issuers' ratings preferences on residential mortgage-backed securities (RMBS) deals, and may have caused a deal-flow hiccup. The most recent pair of RMBS deals – from Beyond Bank and AMP Bank (AMP) – came to the market without a rating from S&P.