News
Commonwealth Bank of Australia leaned on domestic investors for its latest tier-two deal, which launched and priced intraday. The issuer says investor appetite drove the deal’s unusual tenor and fixed-to-floating rate structure.
A comfortable oversubscription and price tightening greeted National Australia Bank’s return to domestic tier-two issuance on 1 March. The bank’s deal was the second domestic tier-two benchmark by a big-four bank in 2023 – the first at 10-year non-call five tenor – and achieved the tightest margin on this type of issuance since April last year.
Market participants are confident Telstra Group’s return to the Australian dollar market will be a catalyst for an issuance resurgence after a dry 2022. Deal sources note the extremely attractive price for the borrower and say the transaction’s five-year tenor is likely not the duration limit of demand in a newly buoyant market.
Increased engagement with sustainability is leading to growing awareness of greenwashing risk – the potential for environmental credentials to be overstated or misrepresented. The Australian Securities and Investments Commission is prioritising greenwashing surveillance and enforcement, supported for the first time by a more coherent policy backdrop.
Queensland Treasury Corporation says offering the first semi-government green-bond syndication of the year only increased demand for new issuance from the sector – particularly from international accounts, which bought around one-third of the deal. Bids comfortably outstripped final volume even when pricing tightened to the left end of the marketing range.
Svenska Handelsbanken printed its largest-ever Kangaroo transaction on 21 February, adding to the record volume of Kangaroo issuance at the start of the new year. The borrower says it was overwhelmed with the reception it received from investors, which led it to take more volume from the market than anticipated.
Coming off the back of difficult issuance conditions and narrow demand in 2022, the Australian securitisation market that met the new year’s first wave of deals provided more positive transaction outcomes. Investors’ willingness to put cash to work in the first two months of the year extended to the structured finance asset class, deal sources say, although there is an ongoing tone of caution about the year ahead.
The cost of syndicated loans and public bonds has converged as banks reach lending limits and credit markets rally. After a year in which Australian companies leaned much more on their banks than capital markets for debt funding, corporate bonds may be the preferred alternative for many Australian borrowers with refinancing needs in 2023.
New South Wales Treasury Corporation highlights a material pickup in offshore participation in its latest syndicated bond offering, as investors globally flock back to the fixed-income market. The issuer says outright and relative yield helped drive the orderbook.
Westpac Banking Corporation’s latest domestic transaction recorded the largest orderbook for any of the bank’s Australian dollar deals, the issuer says. A more stable market in 2023 and the ongoing belief that an interest-rate peak is in sight drove support for Westpac’s return to market.
Asian Development Bank took advantage of relative market stability following the first Reserve Bank of Australia board meeting of the new year and competitive Australian dollar funding costs to bring its latest Kangaroo gender bond to market. Deal sources say investors continue to adjust to the higher rates environment, fostering a supportive new-issuance environment.
ANZ Banking Group continued its tier-two issuance on 6 February with the Australian dollar market’s first 15-year non-call 10-year benchmark transaction. The borrower says the deal was prompted by reverse enquiry but distribution went far wider, and it hopes this issuance will help develop the longer-dated callable tenor in the domestic market.