News

A delegation from Korean National Oil Corporation (KNOC) commenced an Australian investor roadshow in the first full week of July. While the state-owned corporate is playing down the likelihood of an immediate deal – and its Kangaroo programme is yet to be completed – executives say they hope the firm will in time become a consistent borrower in the Australian market.

Westpac New Zealand (Westpac NZ) closed its second domestic senior unsecured public transaction of 2012, announcing on July 7 that it placed a total of NZ$620 million (US$498.7 million) across a new five-year floating rate note (FRN) and new seven-year FRNs. The latter tranche is the issuer's second-ever domestic seven-year public bond issue.

KfW Bankengruppe has priced a tap to its January 2016 Kangaroo, adding to the A$2.3 billion (US$2.36 billion) outstanding in the line. Its previous deal priced on June 15 2012 for A$350 million at 144.75 basis points over ACGB, maturing on February 9 2022.

Market participants confirm that the return of Kangaroo issuance in June – which included the year's largest deal so far, a A$1.1 billion (US$1.1 billion), two-tranche issue from the Asian Development Bank (ADB) – was driven by demand from outside Australia. However, active issuers say they continue to be content with the state of the market while there are hopes that domestic demand will return in time.

Steady rather than spectacular primary market issuance in the second quarter was enough to keep first half volume in the Australian domestic wholesale market tracking ahead of record figures when government-guaranteed issuance is excluded. Other Australasian markets did not fare as well through the first half of 2012, with Kangaroo and securitisation issuance in particular lagging previous years' volume.

A new residential mortgage-backed securities issue by Liberty Financial (Liberty) has priced at the end of June. The nonconforming deal, Liberty Series 2012-1 Trust, has volume of A$300 million across its eight rated and one unrated tranches, making it Liberty's largest RMBS transaction to be brought to market since April 2009 according to KangaNews data.

A flurry of Kangaroo deals hit the domestic market in the week ending June 29 2012 drawing less frequently-seen names and big transactions to Australia. An Australian residential mortgage-backed security priced on Friday, and across the Tasman, one Kauri made its way to the market.

Nordic Investment Bank (NIB) (AAA/Aaa) has priced a tap to its March 2017 Kauri, three months after the line was introduced. The transaction adds to the outstanding NZ$200 million (US$157.9 million) notes priced at 43 basis points over swap.

Asian Development Bank (ADB) (AAA/Aaa/AAA) has priced a new five-year Kangaroo, its second deal of the year. ADB's most recent deal in March was a 10-year A$500 million transaction priced at 34 basis points over benchmark and 99.5 basis points over ACGB. It has A$6.375 billion (US$6.388 billion) outstanding over seven lines.

Three corporate bonds came to the Australian domestic market in the week ending June 22, accompanied by a large-volume domestic tap by a big four bank and a Kangaroo from Nordic Investment Bank - which increased the tap in less than 24 hours. The New Zealand market remained quiet.

National Wealth Management Holdings (National Wealth) (A+) returns to the domestic market with a A$120 million top-up to its August 2015 floating rate notes. The deal was twice oversubscribed and closed in an hour, mostly taken up by funds and middle market accounts. Mark Abrahams, director of debt syndicate at sole lead National Australia Bank, says National Wealth is well funded, and has not needed to approach the market since the 2015 line was last tapped in November 2010.

Still troubled by European setbacks, Seek decided to pull its retail bond offer and the Australian market saw just one domestic transaction - from debut issuer ANZ Wealth - and one Kangaroo price late in the week. One deal priced across the Tasman as well, and New Zealand is expecting a rare asset-backed security after its launch this week.