News

New Zealand Local Government Funding Agency built its Sustainable Financing Bond Framework on two asset types: use-of-proceeds and sustainability-linked loans to local councils. The issuer attracted a jumbo book to its debut transaction from the framework, even though the specifics of its programme mean its deals do not fully align with international principles and it is not using the green, social or sustainability bond labels.

Worley revived a deal process it initiated in 2022 to debut in the Australian dollar market with a sustainability-linked bond. Issuer and leads say the transaction – which attracted a primarily domestic investor base – demonstrates the underlying robustness of risk appetite in the local credit market, while also allowing the issuer to enhance its own sustainability targets.

The write-off of Credit Suisse hybrid notes has raised once more the issue of who provides additional tier-one capital to Australian banks and insurers. But market users insist hybrid investors as a group are more sophisticated than they are often given credit for, highlighting the local market’s relatively muted response in recent weeks as a sign of its rationality.

ANZ Banking Group reopened the Australian dollar senior credit market with a jumbo transaction on 28 March, the issuer lauding the breadth and depth of support the deal received. But factors including a disrupted calendar in April and borrower needs mean issuance is unlikely to rebound to levels seen at the start of the year – especially as event risk remains elevated.

Following the settlement of its inaugural euro benchmark – which was also its second-ever green-bond transaction – NBN Co says issuing in a new jurisdiction should help refresh its global curve including a pricing impact in the US dollar market. The early signs were positive as the euro deal priced inside NBN’s US dollar bonds with a diverse book.

The Australian Sustainable Finance Institute published the final recommendations report for the forthcoming local sustainable finance taxonomy on 27 March, lauding “broad consensus across the finance sector, industry, civil society and real economy actors” on its key design elements. The main evolution of the taxonomy during its design phase is greater demand that the document should be flexible to accommodate future priorities.

The KangaNews Market People of the Year were revealed at the KangaNews Awards Gala Dinner on 21 March. These are the individuals who voters in the KangaNews Awards 2022 believe went above and beyond their roles to contribute to the development of the Australian and New Zealand debt markets. There are no restrictions on the firms, positions or seniority of winners – voters are simply asked to consider who contributed most to the market in either or both 2022 specifically or across the span of a career.

Meridian Energy’s retail green bond priced the day before the Silicon Valley Bank crisis hit newsstands. Market participants say the deal’s result provides further proof of the strength of New Zealand’s retail corporate bond market. Global primary markets have been all but shut since the shock, but Kiwi Property Group proceeded with its launch on 14 March, suggesting the New Zealand retail market is pushing ahead.

As global markets gradually come to terms with the implications of the collapse of Silicon Valley Bank, Australian market participants agree that even the world’s better regulated banking sectors – and wider credit markets – will feel ongoing negative consequences from what most believe to be an idiosyncratic risk event. The bank failure brought a promising start for credit issuance in Australia to a screeching halt and while there are hopes for rebound in due course it will likely be on a more fragile basis.

Thinktank Group took advantage of an improving securitisation market to print an upsized transaction in its first market visit of 2023 – just before the latest wave of event risk put Australian new issuance on hiatus for the near term at least. Thinktank has aspirations to price two further deals this calendar year but says its latest transaction sets it up well in an environment of slower lending growth.

In one of the last primary transactions to price in the Australian dollar market before the collapse of Silicon Valley Bank put new credit issuance on hiatus, Angle Asset Finance found interest from European and Asian investors in its latest securitisation deal. The issuer says it marketed the deal – its second ever – broadly, which helped increase size over its 2021 debut.

The NZ$4 billion volume of New Zealand Debt Management’s first syndicated transaction of calendar 2023 represents its largest deal since it was called on to fund the initial response to COVID-19 in 2020. The issuer credits offshore demand strength and a willingness to offer investors a compelling price for facilitating book and transaction volume.