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Deal sources say New South Wales Treasury Corporation’s latest use-of-proceeds sustainability bond found solid interest from offshore Asia investors despite elevated interest rate volatility. The issuer also confirms its commitment to remaining active through all types of market conditions.
Like the Australian corporate debt market as a whole, the local sustainable debt space has progressed in leaps and bounds over recent years but still has a mountain to climb. The emergence of sustainability-linked instruments has opened the sustainable-debt door to a new range of borrowers, while investors are increasingly integrating sustainability principles in their credit processes. Participants at a roundtable convened by KangaNews and Westpac Institutional Bank in November discuss their sustainability journeys and how they are preparing for the climb ahead.
Having celebrated his 30th anniversary with Westpac Banking Corporation in 2021, chief economist Bill Evans is in a unique position to view the challenges facing markets and economies thanks to his deep understanding of how they have responded to comparable events in the past. Evans speaks to KangaNews about the economic outlook, the wealth trade-off between wage earners and asset owners, the risk of deglobalisation and how sustainability is factoring in to his forecasting.
The Reserve Bank of Australia met market expectations in its first statement on monetary policy of 2022, confirming the imminent end of bond purchases and taking a markedly more positive tone on the economic outlook. But analysts interpret the lack of a move to a more aggressive rate hiking cycle as a more dovish tone than the reserve bank could have taken, pushing back higher rate expectations to the second half of the year.
Early-year supranational, sovereign and agency deal flow in the Kauri market demonstrates the attractiveness of New Zealand issuance to global borrowers, as deal sources say each of the three transactions completed by late January provided a positive outcome for its issuer.
Westpac Banking Corporation’s first domestic senior-unsecured transaction since 2019 met expectations that have become increasingly positive in the wake of multiple successful deal prints at the start of the new year. Volume was at the upper side of estimates thanks to ongoing strong investor appetite for bank paper.
Asian Development Bank took advantage of favourable Kauri market conditions to price its largest-ever New Zealand dollar deal on 18 January – also the first new issuance in the market this year. The issuer says limited Kauri supply, ample investor cash balances, attractive outright yield and upcoming redemptions helped the successful placement.
Australian strategists and traders believe the Reserve Bank of Australia is unlikely to change its monetary-policy plans in response to a more aggressive US Federal Reserve, despite rising yields over the last month. The divergent central-bank paths could lead to more volatile markets, however.
Toyota Finance Australia says executing at the very start of the year was a key aspect of its return to the euro market after an almost two-year hiatus, as it aimed to price before deal flow picks up in the weeks ahead. The issuer priced €1.15 billion (US$1.3 billion) of three- and six-year bonds on 5 January, a notably early start for Australian corporate issuance.
National Australia Bank returned to the offshore term funding market at the start of the year after electing to stand back from more turbulent markets in Q4 2021. The bank says positive results in the sterling covered-bond and US dollar markets further demonstrates a constructive new-issuance environment.
Commonwealth Bank of Australia has set a wider new-year pricing benchmark in the Australian dollar market but was rewarded for its willingness to meet the market on price with a jumbo book and record final volume. The issuer says the print reflects a constructive tone in the local market and that regulatory change has not negatively affected Australian dollar demand.
Jemena says the green element of its latest round of debt refinancing was key to investor interest, with the use-of-proceeds model attracting demand to the issuer’s recent private placement and syndicated loan deals. The late 2021 transactions represent the company’s first foray into green finance, a tool it expects to develop in future transactions.