The Australian Prudential Regulation Authority (APRA) has revealed plans to introduce an eased capital treatment regime for residential mortgage-backed securities (RMBS), with the intention of allowing authorised deposit-taking institutions (ADIs) more access to capital relief while market conditions remain challenged. However, the regulator stresses the new treatment will be a transitional measure.
Australian residential mortgage-backed securities (RMBS) issuers are calling for further government support to aid the market's recovery, including an extension and broadening of the Australian Office of Financial Management (AOFM)'s investment mandate. But there is resistance to the idea of instituting any kind of permanent government involvement in the market, such as a Canadian-style mortgage agency.
In the wake of the November 23 placement of the A$400 million (US$386.8 million) inaugural Kangaroo bond from the International Finance Facility for Immunisation (IFFIm) (AAA/Aaa/AAA), the issuer's treasury manager, World Bank, has exclusively talked to KangaNews about why IFFIm is unique among supranationals and the factors underpinning its triple-A ratings.
Diversity in the senior unsecured bank sector received a welcomed boost this week as Suncorp Bank (Suncorp) (A+/A1/A1) issued the first benchmark non-government guaranteed deal from an Australian bank outside the big four since 2008. While the transaction priced competitively with what the issuer could have achieved in the securitisation space, there are doubts that the transaction will spark significant public senior unsecured deal flow from lower-rated and regional banks.
KfW Bankengruppe (KfW) (AAA/Aaa/AAA) has mandated TD Securities and Westpac Institutional Bank for an increase of its 6 per cent August 2020 Kangaroo bonds. The top-up will be priced in the near future, subject to market conditions. The 2020s are the longest-dated Kangaroo bonds KfW has on issue, with A$1 billion (US$98.6 million) outstanding.
On November 23 Suncorp Metway (Suncorp) (A+/A1/A+) priced a A$900 million (US$886.9 million) two-tranche June 2013 transaction via Deutsche Bank and UBS Investment Bank. The A$300 million fixed rate notes and A$600 million floating rate notes priced at 110 basis points over swap and the three-month bank bill swap rate, respectively.
On Tuesday November 23 the International Finance Facility for Immunisation (IFFIm) (AAA/Aaa/AAA) priced its inaugural Kangaroo bond via Commonwealth Bank of Australia and RBC Capital Markets. The A$400 million (US$394 million) five-year bond offers a 5.57 per cent coupon and priced at 76 basis points over the April 2015 Australian Commonwealth government bond.
The Australian securitisation market is approaching year end in much the same way it did 12 months ago, with a clutch of deals coming to market in the final weeks including a smattering of activity without the support of the Australian Office of Financial Management (AOFM). Market participants say there are a number of key issues still to be worked out but also believe there are reasons to be hopeful about 2011's prospects.
Stockland (A-) has completed a new A$160 million (US$158.4 million) 10-year domestic line, which was upsized from a launch volume of A$100 million. As part of the exchange offer, the issuer also conducted a partial buyback of its outstanding June 2011 and May 2013 maturities, accounting for a total of A$70 million of paper across the two lines.
Following a notice issued to bondholders (via their nominees) on October 8 2010, Sydney Airport Corporation (Sydney Airport) (BBB/Baa2/BBB) will redeem all outstanding November 2011 bonds totalling A$282.2 million, on November 22. These are the bonds that were partially exchanged and extended in June 2010, in conjunction with Sydney Airport's new A$175 million July 2015 bond issue.
On November 18 Bank of New Zealand (BNZ) (AA/Aa2) priced its first euro-denominated covered bond, issued off the bank's NZ$3 billion (US$2.3 billion) covered bond programme. The EUR1 billion (US$1.35 billion) seven-year deal priced at euro mid-swaps plus 62 basis points, which equates to 90 basis points over dollar-Libor. With an order book of EUR1.35 billion and 60 accounts participating, the issuer says there was strong demand for this debut.
Police and Nurses Credit Society (PNCS) and Resimac have both announced forthcoming residential mortgage-backed securities (RMBS) deals, taking the total number of asset-backed securities (ABS) transactions emerging in the past week to five. PNCS's inaugural RMBS has an indicative volume of A$250 million (US$243.95 million), while Resimac's has an expected A$400 million size.