Citigroup completed its first Australian residential mortgage-backed securities (RMBS) issue since 2008 on April 19. The deal achieved its target volume of A$760 million (US$797.8 million), with leads revealing that the book was oversubscribed - predominantly by domestic asset managers. The deal, Secured Australian Mortgage Trust 2011-1, is the fifth domestic RMBS to price in April following just three transactions in the first quarter.
On April 7, KfW Bankengruppe (KfW) (AAA/Aaa/AAA) increased its February 2018 Kangaroo by A$300 million (US$316.7 million). The tap – which is KfW's seventh Kangaroo transaction this year – adds to a line which was inaugurated on February 16 at a size of A$500 million.
The amalgamated Auckland Council (AA) made its medium-term note (MTN) debut on April 1, pricing NZ$200 million (NZ$153.7 million) equally split between an October 2013 and an April 2017 tranche. However, while the issuer is currently restricted from funding in both the offshore and domestic retail markets it does not plan to place another institutional transaction for at least three months.
Kommunalbanken Norway (KBN) (AAA/Aaa/AAA) launched and priced a new A$250 million (US$258.2 million) 10-year Kangaroo line on April 5, in what was the borrower's third Kangaroo issue of the year and its first for more than two months. The transaction significantly extends KBN's Kangaroo curve - prior to the completion of the new transaction its furthest point sat at January 2015.
Liberty Financial priced its first residential mortgage-backed securities (RMBS) transaction of the year on April 8, with the Liberty Prime Series 2011-1 achieving total volume of A$250 million (US$262.1 million). The transaction, which is also the first non-bank RMBS transaction in Australia this year, contains six tranches with the A$50.75 million A2 notes sold to the Australian Office of Financial Management.
Queensland Treasury Corporation (QTC) (AA+/Aa1) has extended the duration of its benchmark bond curve with the placement via bookbuild of a new July 2022 line. The treasury corporation's longest-dated benchmark bond before the new line's pricing was the Commonwealth-guaranteed June 2021, while its longest-dated state-guaranteed line was the February 2020.
Rentenbank (AAA/Aaa/AAA) has priced its first Kangaroo transaction for nearly two months, and its second new line this year, with the completion of its April 2018 transaction on April 5. The A$250 million (US$258.1 million) deal added to the A$1.4 billion (US$1.5 billion) already placed by Rentenbank this year in Kangaroo format.
With activity in the domestic primary bond market slowing in recent days, attention has turned to the offshore bid for Australian dollar paper. While an Asian ownership connection to the most recent domestic corporate transaction did not significantly alter the strong local bias of recent corporate books, there are signs that the Kangaroo market is currently more dependent on Asia to drive deals than was the case at the start of the year.
The debut residential mortgage-backed securities (RMBS) transaction from Community CPS Australia (CCPS), which priced on April 7, was also the first Australian RMBS from a non-frequent issuer this year. The transaction, Barton Series 2011-1 (Barton 2011-1), reached its indicative volume of A$300 million (US$313.7 million) at the tighter end of its launch margin range.
On April 6, Commonwealth Bank of Australia (CommBank) issued a A$3 billion (US$3.1 billion) residential mortgage-backed securities (RMBS) transaction, which was upsized from a launch volume of A$1 billion. It is the second RMBS to come from a domestic major bank this year and CommBank's first since 2007, although it did issue through its Bankwest subsidiary in November 2010.
Société Générale (A+/Aa2/A+) completed a A$400 million (US$413.4 million) increase to its existing October 2014 floating rate note (FRN) Kangaroo bond on March 31. The tap – which was upsized from a launch volume of A$200 million – adds to an FRN tranche which now has A$650 million outstanding and sits alongside the A$250 million fixed rate piece of the same line.
The New Zealand Debt Management Office (NZDMO) has announced two increases to its domestic borrowing programme for the current financial year, adding NZ$1.5 billion (US$1.2 billion) on March 30 and again on April 12. The target maximum to be raised now at NZ$16.5 billion having previously had NZ$1 billion added in December last year.