News
Consistent Australian dollar issuance, as well as further deals from its Japanese peers, resulted in significant domestic investor support for Sumitomo Mitsui Financial Group (SMFG)’s latest transaction. Deal sources say technical factors on the buy and sell side are proving supportive for global financial institution (FI) issuance in Australian dollars.
The domestic bond market has supported a steady flow of 10-year corporate deals in recent months. Dexus Finance (Dexus) is the latest corporate to have issued at this tenor domestically and the issuer says the ability consistently to price deals at the long end shifts its appetite for domestic-market deals significantly.
The H2 2019 iteration of the Fitch Ratings (Fitch)-KangaNews Australian Fixed-Income Investor Survey suggests asset managers have a relatively negative outlook on the Australian economy. Geopolitical risk is top of the agenda, while investors anticipate further monetary stimulus and a weak operating environment for local business.
La Trobe Financial tested the waters for greater volume in its latest residential mortgage-backed securities (RMBS) deal. The issuer achieved its record deal size and says improving credit quality and structural tweaks designed to meet specific demand helped increase the transaction’s appeal.
The Bank for International Settlements (BIS)’s newly-established green-bond fund aims to help central banks incorporate environmental sustainability objectives in the management of their reserves. Antipodean central banks are increasingly sounding alarm on the risks posed by climate change, but so far only the Reserve Bank of New Zealand (RBNZ) has invested in the fund.
Improved relative pricing and a desire to diversify a substantial total loss-absorbing capacity (TLAC) requirement led Mitsubishi UFJ Financial Group (MUFG Group) to print its debut Australian dollar benchmark deal in September. The issuer is putting its green-bond-qualifying assets behind its TLAC programme in a bid to maximise the participating investor base.
The New Zealand Financial Markets Authority (FMA) says the purpose of its consultation on socially responsible investment (SRI) product is to foster a supportive regulatory environment while ensuring such product is appropriately labelled for retail investors in particular. Simultaneously, the regulator is also attempting to take a flexible approach to same-class exemption for green, social and sustainability (GSS) bonds.
John Deere Financial (John Deere) priced its largest-ever Australian dollar deal in on 24 September. The issuer says deepening liquidity allowed it to fund a greater proportion of its Australian business locally and that it now has greater confidence on local volume.
The nonbank lending sector represents a significant portion of the Australian securitisation market. While the volume and frequency of deals indicates an increasing level of investor comfort with the sector, myths pertaining to nonbanks’ lending practices persist and could inhibit future funding growth.
The Australian Securitisation Forum (ASF) is consulting with market participants on interest-rate benchmark reform as it relates to securitisation. The consultation comes amid accelerating global moves to adopt alternative reference rates and fallback language, and ongoing questions about the resilience of the Australian securitisation market’s most commonly used benchmark.
Pacific National printed Australia’s largest 10-year corporate bond so far this year and the issuer’s largest in the domestic market on 18 September. Deal sources say the transaction makes clear once again that domestic support for 10-year corporate paper is available for issuers willing to test it.
Wingate Consumer Finance (Wingate) printed its debut public asset-backed securities (ABS) transaction on 18 September. The issuer believes it is capitalising on a niche in Australia’s increasingly competitive lending market and now has the funding diversity to pursue its growth plans.