Bank of Queensland (BOQ) (BBB+/A2/BBB+) says the A$1 billion (US$897.5 million) government guaranteed March 2015 transaction it priced on March 1 will help term out the issuer's maturity profile in an environment where unguaranteed tenor continues to be harder to achieve. The fixed- and floating-rate deal priced at 79 basis points over government securities or 35 basis points over bank bill swap rate.
The A$600 million (US$532.38 million) new 10-year Kangaroo transaction closed on February 25 by Asian Development Bank (ADB) (AAA/Aaa/AAA) saw the majority of bonds placed with domestic investors. The RBC Capital Markets (RBCCM) and UBS Investment Bank-led transaction priced at 78 basis points over April 2020 Australian government bonds or around 27 basis points over semi-annual swap.
The third Australian residential mortgage-backed security (RMBS) transaction of 2010 priced on February 25, with Credit Union Australia (CUA) bringing A$650 million (US$579.93 million) to market in the Series 2010-1 Harvey Trust (Harvey 2010-1) transaction. Harvey 2010-1 is the issuer's first securitised transaction since March last year.
The A$500 million new September 2011 issue completed by Treasury Corporation of Victoria (TCV) (AAA/Aaa) on February 24 was a one-off, private market trade and not the inauguration of a new benchmark, the issuer says. The deal's lead managers, ANZ and UBS Investment Bank, say it was based on reverse inquiry while TCV had a specific client position it wished to cover.
New South Wales Treasury Corporation (TCorp) (AAA/Aaa) is taking an aggressive approach to moving away from federal government guaranteed funding, with the issuer announcing on February 24 that it will introduce three new unguaranteed benchmark lines by the end of March. The first of these new lines, the August 2013, will be brought to market via a A$750 million (US$669.98 million) tender on February 25.
Despite the success of its second new unguaranteed benchmark deal of 2010 – in which the issuer priced A$2.5 billion of February 2020 bonds – Queensland Treasury Corporation (QTC) (AA+/Aa1) is still not ruling out future issuance under government guarantee before the scheme's year-end expiry. The new transaction priced at 16 basis points over swap on February 23.
In its first deal in the Kangaroo market since May 2008, on February 23 European rolling stock agency EUROFIMA (AAA/Aaa) priced a A$200 million (US$179.76 million) increase to its January 2014 line, which now has A$1.2 billion on issue. The issuer confirms that the deal was capped in size as it is a back-to-back funder.
The first Kangaroo transaction for nearly a fortnight priced on February 22 as KfW Bankengruppe (KfW) (AAA/Aaa/AAA) sold a A$250 million (US$225.2 million) increase to its May 2015 line, bringing the bond's total outstanding to A$1.25 billion. The deal priced at 82 basis points over the benchmark April 2015 Australian government bond, which ratesheet data indicates equates to around 40 basis points over swap.
The government guaranteed March 2015 bond priced by ING Bank Australia (ING Australia) (A+) on February 18 was capped at A$2 billion (US$1.79 billion) with significant oversubscriptions on the back of heavy demand for the soon-to-disappear guaranteed asset class. The deal was for A$1 billion each of fixed and floating rate paper with pricing of 33 basis points over swap and bank bill swap rate respectively.
The Australian Securities Exchange (ASX) is active in moves to develop Australia's listed bond market for both sovereign and corporate issuers according to the exchange's managing director and chief executive, Robert Elstone. It is also hopeful that the federal government will eventually decide to facilitate retail access to sovereign debt and that this will, in turn, help pave the way for corporate issuance.
The increase to Kommunalbanken Norway (KBN)'s (AAA/Aaa)'s February 2013 floating rate notes (FRNs) that priced on February 10 priced at 35 basis points over the bank bill swap rate (BBSW), compared with 43 basis points over BBSW when the line was inaugurated on January 28.
Concerns over eurozone sovereign risk have affected relative valuation of supranational, sovereign and agency (SSA) Kangaroo bonds but market participants say the pricing moves have not come accompanied by major secondary flows. And with European Investment Bank (EIB) (AAA/Aaa/AAA) insisting it will not be used as the funding vehicle for any European sovereign bailouts, there are also hopes that market jitters will calm.