The 2012 bond deal launched last week by Holcim Finance Australia (Holcim) (BBB/Ba2/BBB) priced on August 4 with a significant upsize, to A$500 million (US$421.7 million) from a launch minimum of A$150 million, while the deal's margin tightened from an indicative 350 basis points over swap to 335 basis points over swap at pricing.
On July 30 European Investment Bank (EIB) (AAA/Aaa/AAA) priced a benchmark A$750 million (US$620 million) 6.5 per cent August 2019 Kangaroo bond via TD Securities (TD) and UBS Australia (UBS). This is the first 10-year Kangaroo bond priced since March 2008 when EUROFIMA (AAA/Aaa) increased its December 2018 bonds.
On July 28 International Finance Corporation (IFC) (AAA/Aaa) priced a second data point on its Kauri curve, bringing a NZ$150 million (US$99 million) 6.25 per cent December 15 2017 deal priced at 57 basis points over the benchmark 6 per cent New Zealand government bond (NZGB) via BNZ Capital (BNZ) and TD Securities (TD).
Rabobank Nederland New Zealand Branch (Rabobank NZ) (AAA/Aaa) added NZ$250 million (US$164 million) to its 2012 line on July 27, more than doubling its outstanding size to NZ$450 million on the back of increasing institutional investor demand for bank paper. There has now been NZ$1.315 billion of local bank issuance in July.
Rabobank Nederland Australia Branch (Rabobank) (AAA/Aaa) returned to the Australian domestic market for the fourth time in 2009 on July 24, bringing its annual issuance to A$2.45 billion (US$2 billion) with the sale of A$1 billion of new 2012 bonds. The same borrower also priced A$200 million of five-year euro-Aussie bonds the night preceding its 2012 issue.
A report by economic consultancy Access Economics (Access) on behalf of the Australian Securitisation Forum (ASF) has recommended a government guarantee on residential mortgage-backed securities (RMBS) and an increased role for the Australian Office of Financial Management (AOFM) as the key measures necessary to revive local asset-backed funding.
The increase to International Finance Corporation (IFC)'s (AAA/Aaa) 2014 Kangaroo bond which priced on July 23 netted volume of A$500 million (US$408.95 million), bringing the total size of the line to A$1.25 billion. Pricing on the deal, which was lead managed by ANZ Banking Group and Commonwealth Bank of Australia, illustrates ongoing tightening in the Kangaroo market.
The Australian Securitisation Forum (ASF) believes a submission it has made to federal treasurer Wayne Swan could pave the way for Australian banks to issue covered bonds. Most significantly, the ASF argues that increased depositor protection in Australia is enough to counter the concerns of the Australian Prudential Regulation Authority (APRA) that covered bonds could subordinate retail depositors in the event of bank failure.
Domestic medium-term note (MTN) transactions from three issuers in the property sector – Leighton Holdings (Leighton) (BBB/Baa1) subsidiary Leighton Finance, Dexus Property Group (Dexus) (BBB+) and Australian Prime Property Fund Retail (APPF Retail) (A) – raised a total of A$640 million (US$520.26 million) at pricings on July 20 and 21.
Westpac New Zealand (Westpac NZ) (AA/Aa2) increased the size of its 2014 government guaranteed domestic transaction by NZ$225 million (US$147.33 million) on July 21 – bringing volume to a total of NZ$575 million just eight days after first selling the bond, which is the bank's first under the domestic wholesale guarantee.
The fledgling revival of the corporate bond market in Australia continues to focus on names from the property sector, with Lend Lease asset management subsidiary Australian Prime Property Fund Retail (APPF Retail) (A) launching a A$150 million (US$119.87 million) three-year maturity transaction on July 17 and at least two other property issuers understood to be circling.
Already the most active Kangaroo borrower in 2009, KfW Bankengruppe (KfW) (AAA/Aaa/AAA) became the largest volume issuer as well with the July 17 pricing of its fourth Kangaroo transaction of the year in the form of a A$250 million (US$200.28 million) increase to its recently inaugurated 2014 line, bringing its outstanding volume to A$1 billion.