News

GE Capital Australia (GE Capital) (AA+/A1) priced its second domestic transaction of 2012 on August 16, placing a new five-year issue with total volume of A$500 million (US$525.6 million). GE Capital last visited the Australian market in May, when it sold A$410 million in a February 2014 maturity floating-rate note.

On August 14, Goodman Funds Management (GFM), a subsidiary of Goodman Group (Goodman), proposed an increase to the margin on the Goodman PLUS hybrid securities it issued in 2007 – in lieu of their redemption at the first remarketing date next year. If the proposal is accepted by securityholders, the margin on the A$325 million (US$341.8 million) hybrid will be increased to 390 basis points over bank bills from the current 190 basis points.

Australia's latest retail corporate transaction launched on August 13 as Crown (BBB/Baa2/BBB) confirmed its plans to issue around A$400 million (US$421.9 million) of subordinated notes. As with the retail transaction launched the previous week by APA Group, the shareholder and general offer of Crown's notes will be open to participants in both Australia and New Zealand.

Following a flurry of securitisation activity at the back end of the previous week, the Australian new issuance market has quietened with just three new deals coming to market – two of them Kangaroos. New Zealand saw one new transaction complete, although there has also been retail deal activity on both sides of the Tasman as APA Group and TrustPower both moved towards issuance.

ANZ Banking Group (ANZ) (AA-/Aa2/AA-) priced its second transaction in the Dim Sum market on August 9, extending the tenor it achieved on its first issue in December 2010 and significantly upping the volume placed. The new deal was for RMB1 billion (US$157.3 million) of three-year notes with a 2.9 per cent coupon, compared with ANZ's debut offering of RMB200 million of two-year paper.

APA Group (APA) (BBB/Baa2) confirmed the details of its much-speculated on subordinated retail notes transaction in an Australian Securities Exchange (ASX) announcement on August 9, revealing its plans to issue A$350 million (US$371 million) via a trans-Tasman offering. The notes will have a March 2018 first call date with final maturity in 2072.

TrustPower (NR) opened its New Zealand subordinated bond offer on August 9 in the market's third new retail corporate transaction of the year. TrustPower has attached a 6.75 per cent coupon to the seven-year issue and says almost all of the NZ$75 million (US$61 million) general offer – which forms half the prospective deal volume – has already been reserved for clients of market participants under firm allocations.

European Investment Bank (EIB) (AAA/Aaa/AAA) priced its third Kangaroo transaction of 2012, and its first since Q1, on August 8, with the placement of a new 10-year line. The deal adds to the A$850 million (US$898.5 million) of Kangaroo paper the supranational has sold so far this year – well down on the A$3 billion it issued in 2011 and the record A$6.1 billion it sold in 2009.

In an exclusive interview with KangaNews, New Zealand's deputy prime minister and minister of finance, Bill English, stresses the government's long-term process of fiscal consolidation over the current timeline for projected budget surplus by 2014/15. English also acknowledges the importance of an effective government bond market but does not commit to maintaining issuance as and when the sovereign borrowing task falls.

Although NZ$1.25 billion (US$1.02 billion) of issuance from international borrowers in less than a week may have reduced the short-term prospects of further Kauri deal flow, issuer and leads on the recent World Bank Kauri transaction say demand for New Zealand dollars – especially in Asia – is growing. World Bank placed NZ$400 million on July 31 in the largest single Kauri issue since 2007.

Although the domestic bid – supported by interest from Asia – dominated the book in the return of Queensland Treasury Corporation (QTC) to the syndicated benchmark market, issuer and leads say the addition of a 144A capability to QTC's benchmark programme also attracted interest from US investors. The treasury corporation placed a new 2019 bond via a A$1.65 billion (US$1.7 billion) bookbuild on August 1.

Although Australian dollar deal flow slowed down in the first week of August, the return of Queensland Treasury Corporation to syndicated benchmark issuance on August 1 helped keep issuance volume healthy. International deal flow also returned to New Zealand's market as World Bank priced the largest Kauri transaction since 2007, and while the Australian securitisation market remained quiet no fewer than three deals received preliminary ratings.