News
Western Australian Treasury Corporation will begin a global roadshow in late May ahead of its planned debut green-bond transaction, with the state funding agency highlighting the interoperability advantages of a largely government-owned asset base. Labelled bond issuance will be limited by the relatively small size of the state’s funding need rather than availability of qualifying assets.
A largely unexpected hike from Australia’s central bank, higher swap spreads and investor interest supported two KfW Bankengruppe Kangaroo taps in the week ending 5 May, taking the issuer’s total Australian dollar issuance in 2023 to a new record for January-May.
Tight new-issue concessions, ample liquidity, the availability of tenor and favourable cross-currency economics are among the drivers sending a host of Australian corporate names on a funding expedition to Europe in recent weeks, deal sources say. Three such deals priced and another two circling since mid-April have been the subject of comment in the European market and demonstrate the clear advantage euro issuance offers in the H1 corporate funding window.
High inflation continues to require a policy response that is squeezing New Zealand economic outcomes, but the Reserve Bank of New Zealand’s May 2023 Financial Stability Report suggests a baseline level of confidence in the foundations. The reserve bank is also sufficiently comfortable with local credit standards to have unwound a key macroprudential measure.
Reverse enquiry prompted World Bank to tap a 10-year maturity in a transaction that also drew the attention of a significant cohort of domestic investors, deal sources say. As expectations for inflation near a plateau, the issuer may come close to a record year in the Kangaroo market.
Western Australian Treasury Corporation published its Sustainability Bond Framework on 2 May, confirming at the same time that it expects to issue under the framework before the end of its current financial year on 30 June. The framework includes green and social use-of-proceeds options, though the state treasury corporation suggests its debut transaction will be a green bond.
Stable market conditions set the backdrop for New South Wales Treasury Corporation’s latest syndicated trade, with final volume supported by uptake from what the issuer describes as a range of high-quality accounts. The positive investor response also laid the groundwork for early positive secondary performance.
The 2023 iteration of the Fitch Ratings-KangaNews Fixed-Income Investor Sentiment Survey came at a major inflection point for credit and rates product, as investors provided responses in late March and early April – shortly after bank failures rocked global markets. The survey response suggests investors are more concerned about what these events portend for economies and markets than the direct risk of contagion.
Australian corporate borrowers have every reason to favour debt capital markets over bank loans for their funding needs in 2023. Risk events and the economic outlook mean caution remains the order of the day domestically, however, and while deal flow is likely to pick up market participants acknowledge that global options are providing strong competition.
Stockland Trust says it achieved what it set out to in its first domestic primary transaction since March 2021. The seven-year deal met pricing and volume expectations though the borrower notes the level of oversubscription was not as high as anticipated. Deal participants say investors have money to put to work but remain cautious about the macroeconomic environment.
The Australian Office of Financial Management’s December 2034 syndication – its first bookbuilt transaction this calendar year – attracted a more than four-times oversubscribed book and broad global demand. The issuer says it was important to send a message about local capital market functionality as volatility continues to ease.
Resimac says asset managers were the main supporters of its latest nonconforming residential mortgage-backed securities offering, which priced on 13 April. The borrower says previously wary investors are showing more confidence to take part in primary market offerings as volatility continues to ease.