News
La Trobe Financial says it found solid demand, especially from offshore, for its latest residential mortgage-backed securities (RMBS) deal, facilitating an upsize even in ongoing challenging conditions for securitisation issuance. The issuer says investor engagement and relative stability in the Australian economy paved the way for a successful transaction.
The Australian Office of Financial Management and Australian federal Treasury have been discussing what would be involved in sovereign labelled bond issuance – for instance green bonds – should the government decide to pursue this. Market sources tell KangaNews the move is part of a growing trend in Canberra toward greater receptibility to sustainable finance, as the government attempts to catch up with international peers.
National Australian Bank says clear investor demand drove the large proportion of fixed-to-floating rate notes in its return to domestic tier-two issuance. The deal required a notably wider margin than the most recent comparable transactions in Australia, but the issuer says it was clearly the best option available for a new tier-two print.
New Zealand is a step closer to implementing mandatory climate risk reporting standards, having kicked off final consultation for a full exposure draft on 28 July. The New Zealand External Reporting Board says its iterative approach to developing a local standard remains key to parlaying voluntary reporting frameworks into an enforceable domestic regime.
Dealers across Australian dollar fixed-income markets neared or reached holding limits in Q2, further drying up liquidity that has been shallow all year. While trading volume is nearing financial crisis lows, market participants say clarity on rates and inflation could see a swift rebound – particularly in investment-grade credit – as investors hunt for bargains.
The Kauri market’s resilient domestic bid and positive US dollar swap basis conditions supported World Bank’s latest New Zealand dollar Sustainable Development Bond deal. The same factors are making Kauri issuance possible at a time when Kangaroo supply has been severely limited.
John Deere Financial noted solid interest for its latest Kangaroo deal, recording a peak order book over A$700 million. The solid result was achieved despite soft offshore demand, according to deal sources.
A specific demand opportunity brought New South Wales Treasury Corporation back to fixed-rate syndicated issuance and is likely to remain a key driver of issuance strategy in what the issuer expects to be a protracted period of market challenges. The agency found robust demand for its 2033 tap, which printed volume of A$1.5 billion (US$1 billion) on 20 July.
RedZed took a pragmatic approach to achieve the volume target for its latest public residential mortgage-backed securities transaction. The issuer says willingness to compromise on initial price guidance allowed it to draw investors into the book and print at a level that worked for both sides, even in a securitisation market that is facing growing headwinds.
South Australian Government Financing Authority struck out on its own on 12 July, syndicating a tap to its May 2036 fixed-rate benchmark – defying recent semi-government issuance dynamics, which have seen limited syndicated supply and a floating-rate focus. The borrower says higher yield on the tap attracted a wide book of investors.
Covered bonds represented better value over senior-unsecured issuance for Westpac New Zealand’s 7 July euro deal. The issuer targeted investor demand for shorter tenor and fixed-rate product, a strategy that deal sources say was key to de-risking execution.
With uncertainty in global funding conditions almost certain to persist, some of the most prominent issuers in the Kangaroo and Kauri markets talk to KangaNews about their programmes and what comes next – including the ever-growing role of sustainable finance.