News
KfW Bankengruppe’s most recent tap took the issuer to its largest volume issued in the Kangaroo market since 2015, including its record for Australian dollar green-bond issuance. The agency says it is optimistic about future Kangaroo issuance prospects, noting incremental demand for green bonds and improved economics in the near term and over the course of the year.
New Zealand’s External Reporting Board has embarked upon a consultation with business on the first part of the standards underpinning the country’s mandatory climate-reporting legislation. The reforms – closely aligned with the Task Force on Climate-related Financial Disclosure recommendations – is making its way through parliament, though concerns about international compatibility remain.
Wesfarmers returned to the euro market, for the first time in seven years, with a sustainability-linked bond, reaffirming its ambitious targets amid softer market conditions. The borrower opted to retain the same sustainability-performance targets from its June Australian dollar debut, a decision issuer and leads say investors welcomed.
World Bank reopened the intermediate-to-long end of the Kangaroo SSA primary market last week, pricing a A$800 million (US$586.8 million) dual-tranche, sustainable-development bond. The deal breaks with the market’s recent pattern of shorter-dated supply.
Auckland Council’s latest green-bond deal follows work over the last 18 months to increase its eligible assets pool. Satisfied with the volume achieved in the domestic market, the borrower says it is now planning to issue offshore in the format following a long absence.
The Australian Office of Financial Management is encouraging lenders to find new investors for positions in warehouses it has held in the Structured Finance Support Fund established in response to COVID-19. While warehouse demand is robust, market sources say it could be tested as more supply hits the market.
New Zealand Local Government Funding Agency has made an early return to the syndicated market, exploiting elevated offshore demand for long-dated New Zealand dollars to complete its largest-ever print.
Treasury Corporation of Victoria priced a A$3.5 billion (US$2.6 billion) floating-rate note on 7 October, in what was the largest single-tranche floating-rate deal ever printed by an Australian semi-government issuer. Bank balance-sheet investors dominated the book, reflecting shifting demand patterns following the announcement that the committed liquidity facility will shrink to zero.
Australia’s nonbank financial institutions have enjoyed an unprecedented domestic funding bonanza in 2021 as circumstances have aligned to provide all-time record securitisation volume and the best pricing conditions since the financial crisis. Book growth and the return of competing supply mean the search for new liquidity pools is likely to move back up the agenda soon, however.
Investa Property Group says green-bond investors are becoming more sophisticated, as it prepares for a green bank-debt capital markets future. The firm recently priced a A$140 million (US$102.4 million) use-of-proceeds green bond, a follow up to Australia’s first such deal in 2017.
Speaking to dealers and investors in the wake of the 2021/22 Western Australia budget, the state’s premier and treasurer, Mark McGowan, reiterated his government’s commitment to a cautious path to reopening to the rest of Australia and internationally. Meanwhile, a cautious price forecast means Western Australia is confident the risks to budget outcomes are on the upside despite the recent precipitous fall in the value of iron ore.
Woolworths’ debut Australian dollar sustainability-linked bond proved popular with investors—the deal was more than four-times oversubscribed at its peak—which deal sources say further illustrates the market’s appetite for the asset class.