FlexiGroup has issued a A$133 million (US$140 million) asset-backed securities (ABS) transaction supported by a pool of consumer loans made by its Certegy Ezi-Pay division. The deal, Flexi ABS Trust 2011-1 (Flexi 2011-1), is the first large-sized securitisation of retail receivables in Australia since the financial crisis, although there have been two auto loan-based issues this year.
With most offshore markets remaining on hold for Australian corporate borrowers the most significant recent development has been the pricing – by Sydney Airport Finance Company (Sydney Airport) (BBB/Baa2/BBB) – of the first post-crisis Maple bond by an Australian non-bank corporate issuer. Intermediaries say the Maple funding option may prove fruitful for further corporate borrowers, with Sydney Airport having obtained attractive pricing on its deal.
Domestic credit issuance has been relatively subdued in recent weeks, largely as a result of ongoing offshore volatility. But intermediaries remain confident that the Australian markets will remain sheltered from any global instability and resumed deal flow should be straightforward once conditions settle.
The South Australian Government Financing Authority (SAFA) (AAA/Aaa) has confirmed that its funding requirement for the 2011/12 financial year will be A$3.7 billion (US$4 billion). The borrowing programme is significantly lower than the A$5.6 billion requirement for 2010/11, as the larger than expected state budget deficit has required the semi-government to restrain its planned spending.
On June 15, Council of Europe Development Bank (CEB) (AAA/Aaa/AAA) launched and priced a tap of its September 2014 Kangaroo line, with a volume of A$150 million (US$160.4 million). A day later the supranational increased the top-up by A$50 million, bringing the total size of the increase to A$200 million and the total in the line to A$1.2 billion.
European Investment Bank (EIB) (AAA/Aaa/AAA) priced a A$350 million (US$368.3 million) increase to its August 2019 Kangaroo on June 16. The tap adds to a line which was introduced in July 2009 and now has A$3.45 billion outstanding, and is set to become EIB's second Kangaroo transaction within a month following a three-month absence.
On June 16, Westpac Banking Corporation issued a new A$2.2 billion (US$2.3 billion) residential mortgage-backed securities (RMBS) transaction. The deal, which was upsized from a launch volume of A$1 billion, is Westpac's second RMBS of the year after the bank reopened the asset-backed market for the big four Australian banks with a A$1 billion issue in February.
High-grade and international issuer activity dominated the Australian market this week, with Bank of New Zealand (BNZ)'s (AA/Aa2) covered bond the most eye-catching deal to close. There was also activity in the Kangaroo market from issuers in the supranational, sovereign and agency (SSA) sector, including a deal from a less-frequent borrower, while domestic credit issuance remained quiet.
The Province of Ontario (Ontario) (AA-/Aa1) completed a A$225 million (US$239.3 million) increase to its September 2020 Kangaroo on June 10. The line was inaugurated in September 2010 at a size of A$275 million with these two transactions remaining the only Australian deals to be placed by a Canadian province since Ontario itself last issued a Kangaroo bond in November 2006.
KfW Bankengruppe (KfW) (AAA/Aaa/AAA) launched its 12th Kangaroo transaction of 2011 on June 7, pricing a A$450 million (US$480.3 million) increase to the February 2018 line it introduced earlier this year. The agency has now sold A$5 billion of Kangaroos in 2011, trailing only the A$6.3 billion it placed in 16 deals in 2010 as its record Kangaroo year.
Commonwealth Bank of Australia (CommBank) (AA/Aa2/AA) completed its first Samurai transaction in three years on June 3 in what was also the largest Australian bank Samurai to come to market this year. The bank says it will continue to monitor opportunities in Japan following its ¥101 billion (US$1.3 billion) dual-tranche five-year deal, while market participants say the other major Australian banks may potentially strike while conditions remain favourable.
The New Zealand Debt Management Office (NZDMO) (AAA/Aaa/AAA) confirmed the initial volume of the new June 2023 benchmark government bond it will introduce via tender on June 10, with NZ$100 million (US$82.3 million) of the new bond to be placed. The new line, the introduction of which comes on the back of what the agency calls strong recent demand for longer-dated New Zealand government securities, will extend the issuer's benchmark curve by two years.