New Zealand's Kiwibank (AA-) has confirmed its intention to become the first Kangaroo bond issuer outside the supranational, sovereign and agency sector for over two years, with the issuer planning to roadshow in Australia next week and follow investor meetings with a three- or five-year deal guaranteed by the New Zealand government.
A discussion paper issued by the Australian Prudential Regulation Authority (APRA) on September 11 could lead to the universe of securities considered liquid assets for banks' prudential purposes being slashed. Market sources tell KangaNews this could mean authorised deposit taking institutions (ADIs) will not be able to hold bonds from the semi-government or supranational, sovereign and agency (SSA) sectors in their liquidity books.
ANZ National Bank (ANZ National) (AA/Aa2/AA-) will issue NZ$225 million (US$157.84 million) of three-year bonds on September 18, bringing the total volume in three-transaction mini-flurry of New Zealand bank deals to over NZ$500 million. Institutional volume has also been boosted by the return of Kauri issuance in the form of Rentenbank's (AAA/Aaa/AAA) new 2014 from September 14.
On September 14 Rentenbank (AAA/Aaa/AAA) priced a new NZ$100 million (US$69.8 million) September 2014 Kauri bond, at 32 basis points over mid-swaps. This is the first Kauri deal priced since the end of July and Dean Spicer, head of debt capital markets New Zealand at lead manager ANZ, says the pricing level is evidence of the compelling rally in supranational, sovereign and agency (SSA) spreads in the last couple of months.
The two biggest funders in the Australian banking market have continued to take advantage of opportunities to issue government guaranteed debt offshore, with record-sized deals coming just before the US Federal Deposit Insurance Corporation reaffirmed plans to withdraw the debt guarantee portion of the local Temporary Liquidity Guarantee Program under any but the most punitive conditions.
Standard & Poor's (S&P) withdrew its AA- rating on ASX Clearing Corporation (ASXCC) on September 10, after the Australia Securities Exchange subsidiary revealed in its recent annual report that it would not be pursuing plans to raise A$145 million (US$124.79 million) via a fixed rate bond issue in either the domestic or US private placement (PP) market.
National Australia Bank (NAB)'s (AA/Aa1/AA) first unguaranteed five-year domestic transaction of 2009 gave another sign that margins in the Australian market are stabilising, with the issuer pricing a total of A$1.5 billion (US$1.29 billion) at 96 basis points over swap and bank bill swap rate (BBSW) in a self-led transaction on September 9.
A day after pricing of the first non-government supported residential mortgage-backed security (RMBS) transaction in Australia this year, CNH Capital Australia (CNH) priced a total of A$400 million (US$343.6 million) in a public and privately-placed agricultural and construction equipment-based asset-backed security (ABS), CNH Capital Australia Receivables Trust Series 2009-1.
Interest in the Australian inflation-linked sector is growing ahead of the return of sovereign issuance, with the expected removal of non-resident interest withholding tax (IWT) on commonwealth government securities (CGS) a particular draw for international buyers. Meanwhile there are signs that domestic allocations to the inflation sector are picking up ahead of an expected increase in supply.
Seven days before the September 15 maturity of a A$1.7 billion (US$1.45 billion) Kangaroo line, Rentenbank (AAA/Aaa/AAA) increased the 2014 bond it inaugurated in July this year by A$200 million – the minimum target size for the transaction at launch a day earlier. The increase is the issuer's second Kangaroo transaction this year and brings the total outstanding in the line to A$650 million.
The A$1 billion (US$855.9 million) of four-year paper priced by Suncorp-Metway (Suncorp) (A/A1/A+) on September 8 appears to indicate a slowing down of the rapid price contraction seen over recent weeks. The deal offered A$200 million of fixed rate paper at a margin of 38 basis points over swap and A$800 million of floating rate notes at the same margin to bank bill swap rate (BBSW).
On September 8, shortly after the Australian Office of Financial Management (AOFM) made its last allocation to a residential mortgage-backed security (RMBS) deal from a bank issuer under its current support programme, Members Equity Bank (MEB) (BBB/A2) priced the first Australian RMBS not to receive government investment since October last year.