News
The Australian dollar nonresident residential mortgage-backed securities issuer pool widened with Brighten Home Loans’ debut deal. The issuer says capital-market funding has been a goal since the business’s establishment and that interest in the asset class is growing with increased supply.
Bendigo and Adelaide Bank’s return to capital-relief residential mortgage-backed securities issuance comes as regional banks continue to experience above system book growth. In an increasingly competitive lending market, the issuer believes it is well positioned as it prepares for the end of the Reserve Bank of Australia’s term-funding facility.
BPCE’s latest Kangaroo deal combined senior-preferred and senior-nonpreferred tranches for the first time in the Australian market since 2018. The borrower says its consistent issuance in Australian dollars is bringing greater investor engagement with each transaction.
The Australian Office of Financial Management issued its first syndication for calendar year 2021 on 13 April. Despite an improving budget position, the issuer says it was committed to establishing a new 2032 line this financial year.
Rabobank Australia’s return to the domestic market yielded a pricing record in an Australian dollar financial institution market still running hot in the absence of local major-bank supply. But there is evidence from the Rabobank Australia transaction that some investors are becoming increasingly price sensitive.
Incitec Pivot has completed a sustainability-linked loan (SLL) facility, a development the borrower and its sustainability structurer say demonstrates how this type of financing can be relevant even for companies in hard-to-abate sectors. In a further development for the Australian SLL market, G8 Education also recently signed a new facility with KPIs primarily linked to social outcomes.
Defence Bank printed a substantially oversubscribed inaugural residential mortgage-backed securities deal on 31 March after initially planning the deal for the second quarter of 2020. The borrower says the long lead time for the transaction allowed for expanded investor relations in which it explained the unique characteristics of its loan pool to potential investors.
The outcome of new EU securitisation regulations that passed into law on 25 March is more positive for Australian issuers than was feared when the changes were first proposed, intermediaries say. Some challenges remain, but it now seems likely that the worst-case scenario – European investors being effectively precluded from participation in Australian-origin transactions – has been averted.
The dearth of consistent data and reporting standards is likely the primary factor holding back green, social and sustainability-linked securitisation issuance in Australia, according to speakers at an Australian Securitisation Forum webinar. If such issuance did come to market it would likely be well received on the buy side.
Fortescue Metals Group visited the US dollar high-yield market on 19 March, taking advantage of strong business and market conditions to secure a refinancing transaction. The issuer says its deal demonstrates the ongoing strength of the US dollar credit market amid continuing global rates volatility.
Developing a product that would work in the Australian dollar market was a stated goal of NRW.BANK when it put together its social-bond programme. In the wake of the issuer’s Kangaroo social-bond debut, its Düsseldorf-based head of investor relations, Frank Richter, discusses delivery of a new programme under pandemic conditions, Australian domestic investor engagement and Kangaroo pricing.
WestConnex Finance Company and Lendlease Group completed 10-year domestic prints in the same week even though the tenor of Australian corporate issuance had shortened in the preceding period. Deal sources say borrowers and transaction specifics helped convince investors to consider longer duration despite growing reflation considerations.