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Auckland Airport says wholesale investors appreciated the short duration of its latest bond deal, a three-year floating rate note . The issuer plans to increase its borrowing programme in future – it is targeting issuance of NZ$500-NZ$800 million a year – and also has a sustainability framework in development.
Attention in 2022 has turned to the undeniable challenges the credit market is facing – perhaps most notably higher rates and cost of living, and pressure on the funding side. But Australia’s leading nonbank lenders – speaking at a roundtable discussion hosted by KangaNews and Natixis – say the new environment carries opportunities for growth.
Contact Energy says retail investors anchored its latest trade, attracted by the yield on offer as well as the issuer’s decarbonisation story. The support of an investor base that primarily tracks outright yield allowed the issuer to print in an otherwise volatile market.
Between the last week of August and late September, 11 new public securitisation deals printed in the Australian market. Market participants say stable pricing and competitive margins – particularly for senior notes – has drawn previously sidelined investors back to the market, including increased interest from offshore.
Pact Group has converted nearly half its debt to sustainability-linked loan format as the packaging company seeks to embed its environmental, social and governance ambitions in its business operations. Deal sources say the new facility is the first loan to an Australian manufacturer featuring a sustainability-linked overlay and shows even hard-to-abate sectors can seize the opportunity to drive change through financing structures.
Reverse-enquiry interest sparked ANZ Banking Group’s return to domestic tier-two issuance on the heels of a jumbo print the bank executed in August. The issuer says the decision to open the latest deal up from reverse enquiry paid off, with tenor and pricing points attracting strong investor support domestically and offshore.
Westpac New Zealand says it does not plan to place a substantial proportion of its remaining new local tier-two requirement in the domestic market despite a significant oversubscription for its NZ$600 million (US$357.4 million) print on 8 September. The deal hit a sweet spot for pricing that attracted retail and institutional investors, supporting the positive outcome.
Transpower says a higher coupon attracted a strong retail bid for its second green bond, with this investor segment taking a relatively higher proportion of the book than is typical for the issuer. The deal also represents a further step for Transpower toward a green debt portfolio, which expects to print another bond by year’s end.
Chorus conducted an unusual liability management tender process alongside its return to euro issuance. Deal sources say the buyback and simultaneous issuance was a win for investors, allowing them to offload short-dated debt and extend duration without changing exposure limits.
North Queensland Airports used a routine debt refinancing to further its sustainability ambitions by aligning with its environmental strategies through a sustainability-linked loan. The facility is the first in Australia to target biodiversity and natural capital, and deal sources say it demonstrates the potential of sustainable finance beyond emissions reduction.
The Australian Prudential Regulation Authority’s interim target for Australian major banks’ total loss-absorbing capacity is less than 18 months away, and while recent tier-two deal flow suggests liquidity is available pricing has registered a stark widening. Dealers and intermediaries say spreading the issuance net will likely be key to managing higher cost of additional capital.
New Zealand Debt Management published its sovereign green-bond framework and associated second-party opinion on 14 September, confirming at the same time that it plans to issue a debut transaction late this calendar year. The framework provides detail on planned use of proceeds from New Zealand sovereign green-bond issuance and explains how the programme aligns with national environmental priorities.