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Plenti Finance is the first issuer to test the Australian dollar market’s support for nonmortgage asset-backed securities in 2024. Deal sources say there was robust support for Plenti’s offering with high coverage ratios across all tranches that allowed significant scaling of the lead manager bid.
While Australia’s major banks have focused primarily – if not exclusively – on their domestic market for funding at the start of 2024, National Australia Bank demonstrated global appetite for these credits with a euro covered-bond return on 29 January. The €1.25 billion seven-year deal achieved record demand and price tightening for an Australian bank in this format, deal sources say, and reflects emerging appetite for longer duration in the region.
Queensland Treasury Corporation added its name to the list of Australian semi-government issuers to syndicate transactions in January 2024, also adding to sustainability labelled supply ahead of its first maturity in the format. The issuer says demand was robust, including notable offshore interest.
ANZ Banking Group capped the volume of its latest trade but says it easily could have printed more, if it needed to. The borrower believes it received the largest peak orderbook in the domestic market, outside the government sector.
Semi-government issuers accessed the domestic market in quick succession in the early weeks of 2024. The deals arrived notably earlier for this sector than previous issuance patterns infer and found plentiful demand, including from offshore accounts.
Nordic Investment Bank opened the New Zealand dollar market for primary supply on 16 January with a five-year Kauri. Deal sources say it is a good first transaction for the year and are optimistic more paper will follow, but are also mindful that more Kauri supranational, sovereign and agency supply could be difficult for issuers to justify relative to other global markets.
New Zealand is well ahead of the game when it comes to net zero transition in power generation, but many other sectors of its economy still have a long way to go to establish long-term sustainable foundations. Recent climate events, meanwhile, make it very clear that the time for delay has long passed. Speakers at the KangaNews-Westpac New Zealand Sustainable Finance Summit, which took place in Auckland in November, discussed the critical issues in the context of making sure the next step is action rather than fatigue.
The KangaNews-Westpac Institutional Bank Corporate Debt Summit 2023 took place in Sydney in mid-October. A record number of delegates gathered to discuss the present and future of the Australian corporate environment, from the economic outlook and business conditions to the forthcoming impact of generative AI. In the mix was a steady but unspectacular corporate bond issuance environment that belies fundamental growth in domestic credit.
Australia has plenty of work to do if it is to align capital and collaboration for a just transition to a sustainable, low-carbon future. Speakers at the Australian Sustainable Finance Institute’s conference in Sydney in October called attention to the financial sector’s role, responsibilities and opportunities to support First Nations Australians and amplify their voices in the wake of the failure of the Indigenous Voice to Parliament referendum.
Australia’s big-four bank funders have enjoyed a notable uplift in domestic capacity for their wholesale issuance that became even more pronounced in 2023. Speaking at a KangaNews-RBC Capital Markets roundtable in Sydney in December, the issuers emphasised the value of a consistent issuance approach even in changeable conditions.
Credit Agricole opened the Kangaroo market for financial institutions for 2024 with a record-breaking deal, the bank saying it chose an early-year window to secure a ‘first mover’ advantage amid a busy start for Australian dollar supply. Even so, the issuer also expressed amazement at the volume of interest in the book for its senior-preferred transaction.
Late year investor engagement and strong fundamentals helped ANZ Banking Group to gather what it believes to be the equal largest book for an Australian dollar tier-two trade. The borrower says interest in the asset class continues to grow even after a successful 2023 for subordinated debt issuance.