Investec Bank Australia (Investec) (Baa2/BBB) became the most recent bank to add tenor to its Australian maturity profile with the March 16 pricing of A$300 million (US$274.5 million) of government-guaranteed bonds. The issuer says while the demand for unguaranteed, longer-maturity issuance from smaller banks remains unknown it made sense to secure five-year funding under guarantee before the scheme's March-end expiry.
The long-anticipated reopening of the Australian corporate bond pipeline commenced on March 15 with Transurban (A-/Baa1/A-) selling A$250 million (US$228.38 million) of four-year, fixed-rate medium-term notes (MTNs) as part of a planned extension of its maturity profile. A number of other issuers are also understood to be close to bringing deals to market, with a refinancing from Adelaide Airport (BBB/Baa2) the latest mooted offering.
Analysts say the new April 2016 line launched by New South Wales Treasury Corporation (TCorp) (AAA/Aaa/AAA) on March 16 should offer a margin slightly above swap to offer fair value and maximise investor interest. Marketing range for the deal is understood to be 50-55 basis points over the April 2015 Commonwealth government securities (CGS), with 51 basis points over being the equivalent of flat to semi-semi swap.
The Australian market continues to receive financial institution (FI) issuers warmly; one week after pricing the first two Kangaroo FIs in three years, Credit Suisse Sydney Branch (Credit Suisse) (A+/Aa1) demonstrated on March 11 that investors are as keen on debuts as they are on resurrections, while BNP Paribas Australia Branch (BNP Paribas Australia) (AA/Aa2/AA) also issued unguaranteed paper. Meanwhile the domestic securitisation market continues to fire and the year's first corporate deal is close to pricing.
ING Bank Australia (ING Bank) (A+) has taken advantage of late demand for government guaranteed paper in Australia to place a trio of transactions in advance of the guarantee's expiry at the end of March. Most recently, the issuer added A$150 million (US$137.16 million) to its August 2013 line in a UBS Investment Bank-led deal that priced at 22 basis points over swap on March 10.
In a March 10 announcement, Kiwibank (AA-) said it was "considering" making an offer of up to NZ$100 million (US$70.55 million) – with room for an upsize of up to a further NZ$50 million – of perpetual callable preference shares, which will provide the bank with tier one capital. Market sources say the transaction is likely to open in April with ANZ as lead arranger.
Following a near four-month absence from Australian and New Zealand markets, on March 9 International Finance Corporation (IFC) (AAA/Aaa) added the pricing of a new five-year Kauri transaction to the A$1.1 billion (US$1 billion) new 2015 maturity Kangaroo it priced on March 3. The Kauri deal was for NZ$275 million (US$193.44 million) of March 2015 paper, and sold at a margin of 35 basis points to five-year government bonds or around 22 basis points over swap.
The Australian Office of Financial Management (AOFM)'s programme of serial investment in residential mortgage-backed securities (RMBS) deals commenced on March 5 as the government debt agency supported a A$673 million (US$606.04 million) issue from ME Bank. Under the serial investment scheme, AOFM will buy up to half the top-rated securities in a run of RMBS deals from five approved issuers.
A revival of the Kangaroo market for financial institutions (FIs) and 2010's second domestic benchmark for a big four Australian issuer joined the continuing flow of guaranteed deals for smaller issuers as bank bond flow ramped up significantly through the week. On March 5, HSBC Bank (HSBC) (AA/Aa2/AA) priced the second FI Kangaroo in two days – and the third in three years – with its A$1.5 billion (US$1.35 billion) 2015 maturity.
Inter American Development Bank (IADB) (AAA/Aaa) completed pricing on a A$375 million (US$338.1 million) increase to its August 2019 Kangaroo issue on March 4. The deal – IADB's fourth Kangaroo transaction of the year – brings the total outstanding in the issuer's 2019 line to A$1.1 billion out of its total A$5.95 billion in the Kangaroo market.
J.P. Morgan Chase (A+/Aa3/AA-), prised open the funding window for financial institutions (FIs) in the Kangaroo market on 4 March, pricing a five-year A$1 billion (US$901.6 million) benchmark. The transaction, which was launched on 3 March, is the first from a US FI since the same issuer sold A$950 million of fixed and floating rate five-year notes at 20 basis points over swap in June 2007.
International Finance Corporation (AAA/Aaa) achieved a significant upsize in the inauguration of its third Kangaroo line on March 3, eventually pricing A$1.1 billion (US$995.61 million) in its new March 2015 from a minimum size at the previous day's launch of A$500 million. Although this is IFC's first Kangaroo of the year it has now priced at least A$1 billion in each of the three years since its 2008 Kangaroo debut.