Suncorp-Metway (Suncorp) priced a new A$1.25 billion (US$1.2 billion) prime residential mortgage-backed securities (RMBS) deal on November 23. The transaction was upsized from a launch volume of A$750 million and is Suncorp's first RMBS since it issued a A$1 billion deal in May 2010.
A trio of supervisory heavyweights headlined the first day of the Australian Securitisation Forum (ASF)'s annual conference on November 21 – but the content of the day's discussions was as much about the future makeup of bank funding and the Australian sector's global investor base as the details of regulation. Overall, regulators believe there should be a role for securitisation in future, but only as part of a multi-faceted funding mix that now also includes covered bonds.
Insurance Australia Group (IAG) set the final rate on its subordinated bond in New Zealand on December 15. The offer opened on November 16 and was initially targeting a volume of NZ$250 million (US$188.7 million), but was upsized to NZ$325 million as a result of oversubscription during the bookbuild process. The minimum interest rate until the first call date, in December 2016, has been set at 7.5 per cent based on the offer's close on December 12.
Westpac Banking Corporation (Westpac) became the second Australian bank to complete a covered bond, printing a US$1 billion issue on November 17. Following ANZ Banking Group (ANZ)'s deal two days earlier, Westpac also chose the US market to make its debut thanks to the more appealing cost of funds sourced in US dollars.
ANZ has appointed a new global head of debt origination and head of capital markets Asia, with Michael Luk set to commence the role on November 23. In the Hong Kong-based position Luk will replace Reuben Tucker, who is returning to his native New Zealand having held the Hong Kong job for three yeas. He will continue to work for ANZ.
The week beginning November 14 saw two new domestic corporate deals come to market. While the major banks turned their attention offshore - with ANZ Banking Group and Westpac Banking Corporation both completing their debut covered bond issues - the asset-backed market also saw the launch of a new auto deal from Capital Finance Australia. In New Zealand Transpower also announced a forthcoming transaction.
On November 15 Transpower (AA-/A1) priced its NZ$200 million (US$150.2 million) offer of unsecured bonds, comprising a four-year floating-rate maturity and a seven-year fixed-rate note. The issue is Transpower's first public transaction in New Zealand since the first half of 2010, when it issued NZ$100 million in a 10-year inflation-linked deal.
Caltex Australia launched and priced a new seven-year A$150 million (US$149.8 million) domestic bond on November 18, which was upsized from a launch volume of A$100 million. The deal is the fourth domestic corporate transaction inside a month after a three month primary market hiatus, with the most recent issue completed by Volkswagen Financial Services Australia (A-/A3) on November 16.
ANZ Banking Group (ANZ) became the first Australian major bank to issue a covered bond on November 15, taking US$1.25 billion in the US market. The bank's Melbourne-based head of group funding, Luke Davidson, exclusively tells KangaNews that the bank expects to build up a number of offshore covered bond programmes in the wake of strong demand for the debut transaction.
Capital Finance Australia issued a new asset-backed security based on a pool of auto loans on November 17. Bella Trust Series 2011-3 has a volume of A$568.3 million (US$559.2 million) spread across seven tranches, the top four of which have secured investment-grade ratings from Moody's Investors Service and Fitch Ratings.
Authorised deposit-taking institutions (ADIs) will pay an annual fee of 15 basis points for committed liquidity facilities (CLFs) provided by the Reserve Bank of Australia (RBA) under new liquidity rules set to be implemented from the start of 2015. The Australian Prudential Regulation Authority (APRA) also suggests its reluctance to allow banks to rely on CLFs to supplement their liquid assets pools could – in the longer term – allow a widening of its list of first-order liquid securities.
Volkswagen Financial Services Australia (VW Australia) (A-/A3) priced a new three-year fixed rate domestic bond on November 16. The deal's volume was increased by A$50 million (US$50.7 million) from its minimum size at launch of A$100 million, with pricing matching its indicative margin of 135 basis points over mid-swap.