News
New Zealand Debt Management (NZDM) printed its first syndicated transaction in 18 months on 18 September, establishing a new May 2031 line. The deal was well-received according to the issuer, with nearly half of the transaction allocated to offshore accounts despite feedback that the relative value of New Zealand government bonds to other sovereigns has declined.
Spark Finance (Spark) returned to the Australian dollar market on 11 September with its first deal since its inaugural Kangaroo in October 2017. Deal sources say there is latent demand in Australian dollars resulting from an undersupply of corporate credit, while the lower-for-longer interest rate environment is pushing demand further out on the curve.
Housing New Zealand (Housing NZ) tapped two of its existing lines on 11 September for an aggregate NZ$600 million (US$383 million). The transaction was the first under a rebranded framework which incorporates all the issuer’s outstanding lines as wellbeing bonds explicitly to signal alignment with the New Zealand government’s broader wellbeing objectives.
Central Nippon Expressway Company (CENEXP)’s first public issuance of Australian dollar denominated bonds was issued off the back of reverse enquiries from investors, deal sources say. After initially announcing an Australian and US dollar mandate, CENEXP elected to print A$350 million (US$240.6 million) of five-year bonds on 11 September in the Reg S market.
Origin Energy (Origin) returned to the euro market for the first time since 2014, on 5 September, with a deal that highlighted European investors’ appetite for duration and for issuers with clearly articulated environmental, social and governance (ESG) strategies. Deal sources say the euros market remains highly globally competitive for corporate issuance.
New South Wales Treasury Corporation (TCorp) priced a A$1.75 billion (US$1.2 billion) transaction in the mid-curve on 5 September, which the issuer says is indicative of its intention to issue across the curve having printed A$2 billion of 2029 maturity notes in June and A$1.25 billion of 2031s in July.
Latitude Finance Australia (Latitude) upsized its most recent master-trust asset-backed securities (ABS) transaction on the back of demand that was especially supportive for lower-rated notes, the issuer says. Its next goal is further to diversity its investor base, a task it hopes will be assisted by the increasing breadth of the Australian dollar securitisation market.
Commonwealth Bank of Australia (CommBank) printed its first tier-two capital deal since the confirmation of Australian total loss-absorbing capital (TLAC) requirements in the form of a US dollar deal priced on 5 September. CommBank is the last of the major banks to make a start on upsizing its tier-two stack but the issuer says it is well set to manage the task.
Declining interest rates and the global hunt for yield has opened pricing opportunities for offshore financial institutions (FIs) to issue Australian dollar additional tier-one (AT1) instruments for the first time in more than a decade. UBS Group (UBS), BNP Paribas and Societe Generale have all printed AT1 deals in Australian dollars since July.
The securitisation of a pool consisting solely of nonresident mortgages priced by Columbus Capital (Columbus) on 30 September is a world-first deal of this type, its arranger says. Assuaging investor and ratings agency concerns on cross-border risk was key to getting the deal off the ground, while the transaction’s success makes issuer and arranger confident there is a robust market for the product.
The Australian Prudential Regulation Authority (APRA) determined on 9 July that Australia’s major banks will need to increase their capital ratios by 3 per cent of risk-weighted assets (RWAs) by 2024 to satisfy total loss-absorbing capacity (TLAC) equivalent requirements. How and where the major banks raise the capital will have ripple effects in the market.
Bendigo and Adelaide Bank (BEN) focused on price discipline in its latest deal through more challenging market conditions. The issuer says investor support remained robust, allowing it to meet its volume target without having to reassess its pricing goals.