News

The Australian residential mortgage-backed securities (RMBS) market kicked into life on March 29 with the pricing of a transaction from ING Bank Australia. The deal, was upsized to A$800 million (US$831 million) from provisional volume of A$500 million (US$524 million), is the issuer's fourth Australian RMBS following its 2010 debut and a brace of transactions last year.

In what has become a busy week for Rentenbank (AAA/Aaa/AAA), on March 23 the German agency priced a NZ$100 million (US$81.8 million) tap of its Kauri maturing December 15 2017, having upsized the transaction by NZ$25 million from its indicative volume at launch earlier the same day.

Deal flow was steady in the week ending March 23 following several weeks of high primary market activity in both Australia and New Zealand. The week's most active borrower was Rentenbank, which capitalised on a visit to Australasia around the NZ Capital Markets Forum and the Australian DCM Summit to price two Kangaroo and one Kauri deals.

Wesfarmers (A-/Baa1) placed its longest-dated issue in the Australian domestic market on March 21, launching and pricing a new seven-year transaction. The deal had indicative volume of A$400 million (US$419.9 million) but was upsized by A$100 million at its launch pricing of 165 basis points over swap.

Just three weeks since pricing its March 2020 Kangaroo, Rentenbank (AAA/Aaa/AAA ) doubled the size of the line by adding a A$250 million (US$264.1 million) tap. The increase priced more than 20 basis points tighter than the inaugural issue of the eight-year maturity bond.

On March 16 the Australian Office of Financial Management (AOFM) announced it had sold A$50 million of residential mortgage-backed securities (RMBS) during March, at 132 basis points over the semi-monthly swap rate. This is the first time during 2012 that a public pricing point has been provided for RMBS as no domestic deals have been priced. It also enables a meaningful comparison to be made between RMBS and covered bond pricing in the domestic Australian market.

Deal flow continued on a rapid and diverse trend over the past week including transactions in the Australian dollar covered bond, Kangaroo, Kauri and securitisation markets as well as vanilla domestic issues in Australia and New Zealand. In ratings actions the most significant move of the week was the downgrade of Macquarie Bank and Macquarie Group by Moody's Investors Service.

Kommunalbanken Norway (KBN) (AAA/Aaa) launched and priced a new Kauri transaction on March 16. KBN is one of the most consistent issuers in the Kauri market having brought at least one New Zealand dollar deal in every year since the market opened for supranational, sovereign and agency issuers in 2007.

The A$500 million (US$521 million) seven-year deal launched and priced by Woolworths (A-) on March 14 continued a trend started by the same issuer last year, as the deal offered a notably tighter margin than recent major bank issuance. Woolworths also highlights the speed with which it was able to close the transaction as an indication of the domestic strength of its name.

ANZ Banking Group (ANZ) (AA-/Aa2/AA-) priced its domestic covered bond debut on March 16, introducing e a four-year fixed- and floating-rate line. The deal is the third domestic covered bond issue from an Australian big four bank, following January transactions totalling A$6.6 billion from Commonwealth Bank of Australia (AA-/Aa2/AA-) and Westpac Banking Corporation (AA-/Aa2/AA-).

Holcim Finance, a guaranteed subsidiary of Holcim (BBB/Baa2/BBB), priced a new three-year maturity Australian dollar transaction on March 16. The deal is the issuer's first foray into the Australian market since it placed a A$500 million three-year in August 2009.

African Development Bank (AfDB) (AAA/Aaa/AAA) priced a new 10-year Kangaroo deal on March 16 in the supranational's third-ever Kangaroo issue and its first since January 2011. AfDB also becomes the 10th supranational, sovereign and agency borrower to price an Australian dollar transaction so far in 2012.