News
Airports around the world have gone quiet as result of COVID-19, bringing corporate liquidity to the fore. Brisbane Airport Corporation was able to re-engage the Australian domestic market in late June for a deal it was looking to execute prior to the crisis. The airport’s head of corporate finance, Warren Briggs, speaks with KangaNews about the deal process and crisis management.
Growing subscription from community housing providers (CHPs) to National Housing Finance and Investment Corporation (NHFIC)’s programme led to the agency’s largest social bond to date.
Kauri issuance rebounded in May-June as more than NZ$2.6 billion (US$1.7 billion) priced, including a rare 10-year transaction of record volume for the tenor. Technical demand drivers are at play but intermediaries suggest positive conditions could remain even as a supply gap closes in the second half of 2020.
Despite the impact of COVID-19 on the commercial property market, deal sources say RedZed Lending Solutions’ inaugural commercial mortgage-backed securities (CMBS) transaction was welcomed by investors in an improving environment for securitisation issuance.
Primary market functionality in Australian securitisation is much closer to normal than might have been expected including an orderly flow of deals in the past month, market sources say. Investor sentiment is improving even as the wider impact of COVID-19 on the Australian economy becomes apparent.
New Zealand Debt Management (NZDM) says its latest, record-breaking syndication had a more straightforward execution process than its previous deal, which came closer to the beginning of the COVID-19 crisis. A clearer sovereign funding picture and ongoing central bank intervention paved the way for jumbo volume despite ongoing economic uncertainty and market volatility.
South Australian Government Financing Authority (SAFA) has continued in its quest to mould the Australian overnight index average (AONIA)-linked issuance market, introducing longer tenor and larger volume. The market environment has changed markedly in the last few months, including for AONIA, but the issuer says engagement continues to grow.
Sumitomo Mitsui Banking Corporation Sydney Branch (SMBC Sydney)’s latest transaction was the largest-ever Australian dollar deal from a bank with offshore parentage. It was also the largest credit deal since the onset of the COVID-19 crisis.
The Green and Social Bond Principles (GBP SBP) is broadening further the scope of its focus on sustainability in fixed-income markets, with an update to its social bond principles (SBPs) and the launch of sustainability-linked bond principles (SLBPs). The new SLBPs are designed to provide the impetus for more entities to consider sustainable financing options, while the update to the SBPs is particularly relevant in the context of addressing the COVID-19 pandemic and the coming economic and social recovery.
Spark Finance is the first New Zealand domiciled corporate issuer to execute a public debt capital markets transaction in 2020 – and it chose Australia for its 28 May deal. The borrower says establishing and maintaining a funding presence in Australian dollars is a key component of its debt strategy.
The Australian dollar market hit a sweet spot for global financial institution (FI) borrowers in the second half of May despite the ongoing absence of the biggest local issuers. Intermediaries say the supply gap has caused a technical pricing squeeze that attracts issuers, while offshore FI pricing remains attractive to real-money investors relative to local names.
Australia’s sovereign rating will be tested in the coming months as the ramifications of the COVID-19 crisis play out through the economy, according to Fitch Ratings. A newly placed negative outlook on Australia’s AAA rating relates to significant downside risks in the domestic economy, including household debt, as well as global factors such as newly levied trade barriers.