News
KangaNews is proud to reveal the results of its 2019 Fixed-Income Research Poll, in which Australian institutional investors are asked to vote for the best research providers across a range of sectors. The ninth iteration of the poll has a familiar look across most categories – consistency of performance is a hallmark of this survey – but there are still a clutch of changes at the top of specific categories.
Participants in Australia’s first syndicated sustainability-performance-linked loan (SLL) say the product could catalyse a significant uptick in corporate engagement with environmental, social and governance (ESG)-linked funding. SLLs are becoming more prominent globally and Sydney Airport’s debut demonstrates that they can have wider applicability for corporate borrowers than other ESG debt instruments.
On 27 May, following the release of the Victoria state budget, Treasury Corporation of Victoria (TCV) revealed a total funding requirement for the 2019/20 financial year of A$5.5 billion (US$3.8 billion). The task is an increase from the A$4.6 billion forecast 2018/19 requirement announced following the 2018 state budget.
Maximising domestic investor engagement was a key strategy for the Export-Import Bank of Korea (Kexim) as it issued in the Kangaroo market for the first time this year. Kexim is also the first Korean entity to price an Australian dollar domestic deal in 2019.
Crédit Agricole priced a A$600 million (US$412.7 million), 15-year non-call 10-year tier-two EMTN deal on 21 May. The deal surprised to the upsize on volume and brought significant diversification of investors according to Crédit Agricole CIB’s syndicate in Australia and Hong Kong, who say the result was sufficient to pique the issuer’s interest in further Australian dollar issuance.
The Australian Office of Financial Management (AOFM) published draft investment principles for the Australian Business Securitisation Fund (ABSF) on 23 May. The proposed investment approach is notably broad, with the AOFM planning to take a “principles-based rather than prescriptive” approach to catalysing SME lending.
In the next step in the evolution of applying blockchain technology to debt capital markets, it is now possible to trade World Bank’s Bond-i on the blockchain platform. Participants say interest in the platform has only continued to accelerate since the deal was introduced in August 2018, and that further development is still ongoing.
Analysts agree that the Australian Prudential Regulation Authority (APRA)’s decision effectively to lower the affordability floor banks are required to apply to mortgage lending is a surprising move. But there is no clear consensus on how material the change will be to the mortgage market, house prices or the rates outlook.
The US private placement (USPP) market has continued to attract double the issuance volume of the Australian domestic market for corporate borrowers despite less competitive US dollar funding costs for Australian corporates during 2019. Sources say USPP pricing is back to a historic low and shows little sign of weakening.
The Australian Securities and Investments Commission (ASIC) and Reserve Bank of Australia (RBA) have co-opted the heads of two of the world’s most significant financial regulators as they endeavour to heighten local market engagement with the process of transition away from global interbank offered rates (IBORs).
Mortgage House priced its first-ever public residential mortgage-backed securities (RMBS) deal on 16 May, as it seeks to demonstrate its ability to source funding from outside its warehouse facilities. The issuer is confident that its origination offering stands out amid an increasingly crowded nonbank field.
On 15 May, World Bank priced a A$800 million (US$553 million) increase to its February 2024 Kangaroo bond, bringing the total outstanding in the line to A$2.1 billion. The tap was led by Deutsche Bank, Nomura and TD Securities and is the largest Australian dollar deal from a supranational, sovereign and agency (SSA) borrower since World Bank introduced the line in February with a A$1.3 billion deal.