News
Domestic corporate bond supply continues apace in 2024 but – to now – absent labelled format. SA Power Networks’ green labelled deal and energy transition narrative provide a point of differentiation, capturing investor attention and landing the deal through theoretical price comps and with a quantifiable greenium, leads say.
Consistent cadence of new issuance has kept Australian dollar securitisation volume comfortably ahead of record pace so far in 2024. In recent months, issuance diversity – in the form of transaction collateral and renewed activity from bank borrowers – has further demonstrated the health of the asset class.
Auckland Council significantly increased the volume of its latest Kangaroo transaction, offering benchmark size in a more widely distributed transaction for the first time. The issuer says it hopes to expand its Australian dollar investor base over time, with the issuer motivation originating in a larger funding task.
Changing views on relative global central bank direction have created an unusual dynamic in the euro swap curve. This technical backdrop provided ANZ an opportunity to achieve the rarity of pricing in a euro senior deal that landed inside the issuer’s Australian dollar curve.
Significantly improved conditions allowed AusNet to execute its Australian dollar market return on an accelerated timeline compared with its 2023 transaction. The outcome aligned with the issuer’s expectations on price and volume, and secured its funding requirements for the year.
Westpac Banking Corporation’s return to the domestic senior benchmark market added A$3.2 billion to the A$2.9 billion printed by National Australia Bank just a few days earlier. While these deal sizes are down on big-four bank domestic records, issuer sources say demand remains strong and high-quality – as evidenced by a substantially oversubscribed book.
Province of Ontario broke several records in its return to the Kangaroo market, the second jumbo print from a Canadian province in a matter of days. Leads are confident there is sufficient demand to attract further Canadian issuance in Australia – if pricing and secondary performance stand up.
A few months into 2024, there can be no doubt that the Australian dollar market is demonstrating an all-time best level of demand for corporate transactions, including investor diversity and appetite for extended tenor. Discussion at the KangaNews Debt Capital Market Summit, which took place in Sydney on 18 March, turned to the prospects for this level of support to remain available consistently in future.
Sydney Airport navigated a significant upturn in market volatility to deliver a massively oversubscribed and competitively priced return to the euro market, the deal group says. European investors responded positively to the issuer independent of its recent successful return to Australian dollar issuance, with the domestic deal not even relevant as a comp for euro pricing.
Investor diversity, relative value and the growing status of the Australian dollar market lined up for Province of Québec as it shattered the record volume for a Canadian province Kangaroo transaction. The A$1.35 billion, 10-year print was nearly four times larger than any previous deal from the sector – a record that had stood for a decade.
Vicinity Centres’ Australian dollar return provides another example of investor support for a wider range of corporate sectors – in this case, an oversubscribed book coming in for an issuer in the retail real estate sector as it seeks to move on from the pains of the pandemic. The issuer says domestic market conditions proved attractive for pricing and tenor.
Sydney Airport’s largest-ever transaction in the Australian dollar market – which is also its first public domestic deal since 2011 – provides another sign of growing corporate borrower confidence in the local funding option. The chance to access extended tenor at volume in line with a global core market benchmark print clearly moved the dial for an issuer that has historically been wary of the reliability of domestic issuance.