News
International Finance Corporation says the Reserve Bank of Australia’s 25 basis point interest rate hike on 1 November opened an Australian dollar issuance window. The A$900 million transaction is the issuer’s largest Kangaroo deal for more than a decade and its first green bond in the Australian dollar market.
As the urgency of action to achieve rapid decarbonisation grows, Australian market participants say work being done by the International Sustainability and Standard Board to establish a global baseline for disclosures is crucial to achieve the efficient and effective allocation of capital.
The Australian Office of Financial Management says nonbank issuers and their lenders have once more raised the idea of government support for securitisation funding. But the agency does not have a mandate to restart the structured finance support fund and says it is currently confident in the asset class’s liquidity.
The Australian federal government seems likely to start sounding industry on mandatory climate reporting in the wake of November’s UN Climate Change Conference, having renewed its commitment to such a regime and directed budget funds to support its development.
Export Finance Australia’s growing funding task and natural need for US dollars led it to the 144A market for the first such public US dollar denominated transaction from an Australian government-sponsored issuer. The agency says its US dollar programme is set up for repeat issuance but it also expects to be active in the domestic market over time.
The Australian major bank credit market reopened with a bang on 27 October after another low-supply period. Commonwealth Bank of Australia priced a A$2 billion (US$1.3 billion) tier-two trade followed a few hours later by ANZ Banking Group pricing a A$4.75 billion senior offering.
Inflation, interest rate increases and geopolitical risks have changed corporate Australia and New Zealand’s view on debt capital markets, according to the 2022 KangaNews-Moody’s Investors Service Corporate Borrowers’ Intentions Survey. The findings highlight a shift in the funding mix as borrowers turn to safe harbours in response to and anticipation of more troubled times.
Financial Kangaroo issuance – particularly from Canadian and European borrowers – has rebounded in 2022. Coöperatieve Rabobank recently joined the fray, noting that the Australian dollar market offered volume it was seeking for tier-two capital issuance at a sound price.
Scoring and pricing sovereign borrowers on the basis of environmental, social and governance performance could have a greater impact on global sustainability than anything else capital markets can hope to achieve. But sovereign debt is the least developed major global asset class when it comes to integrating sustainability factors.
The Australian Sustainable Finance Institute has completed the international framing study that forms a significant part of the groundwork for the forthcoming Australian sustainable finance taxonomy. The resulting report – Analysis of International Taxonomies and Considerations for Australia – published on 17 October, sets out some principles for what a taxonomy should aim to achieve based on global experiences.
Avanti Finance’s latest residential mortgage-backed securities transaction maintains its pattern of being in the public structured finance market on an annual basis. The borrower says KiwiSaver funds’ comfort with the asset class continues to grow despite the obvious headwinds.
Flexibility on pricing helped Treasury Corporation of Victoria entice real-money investors to join the bank bid for its latest syndicated transaction, the issuer says. The deal completes the build-out of the state’s maturity curve to 2037 and market conditions will dictate future issuance duration.