News

Incitec Pivot priced its first Australian dollar deal in more than five years on 8 March. The issuer cites the increased availability of seven-year debt as a key factor in its return while deal sources say the rarity of the credit led to significant demand for the transaction.

Santos Finance (Santos) became the first Australian corporate borrower to access the US dollar Reg S market in nearly a year on 6 March, when it priced its second transaction in this format. Deal participants say the market is retracing the spread widening that occurred in the second half of 2018 and becoming an attractive option again for corporate borrowers looking for longer tenor deals.

MUFG Bank Sydney Branch (MUFG Sydney) priced the largest-ever single-tranche deal from a Japanese bank in the Australian market on 5 March. A number of factors contributed to this outcome, sources say, but the void left in operating company (opco) issuance by international banks as they move to a holding company (holdco) structure was a particular driver.

Analysts tell KangaNews the trigger of a stepdown provision in Suncorp Group (Suncorp)’s Apollo 2010-1 residential mortgage-backed securities (RMBS) trust is not a sign of systemic problems with the asset class, despite rising arrears in the loan pool. In fact, they say the function is working as it should – to protect senior noteholders.

Programmatic certification eased the route to market for Queensland Treasury Corporation (QTC)’s second green-bond transaction, the issuer says. With considerable growth in the eligible pool of assets since QTC’s first green bond in 2017, deal participants say the new deal demonstrates how borrowers can scale up their green issuance over time.

McDonald’s Corporation (McDonald’s) capitalised on rallying market sentiment and a lack of recent corporate Australian dollar issuance to achieve a significant volume and tight pricing in its Kangaroo debut, according to deal participants.

The impending likely demise of global interbank offered rates has sparked many questions for the Australian market. Its local credit reference rate appears to be relatively robust – though its status is not unimpeachable – while the importance of cross-border issuance to Australian borrowers requires engagement with international IBOR developments. KangaNews and Commonwealth Bank of Australia brought together key market participants in late January to discuss the way forward.

Proposed new capital requirements for New Zealand’s banking sector are causing consternation in the local debt market as participants grapple with a raft of potential implications. The consequences for the fixed-income sector – intended and unintended – are potentially game-changing and are relevant to sectors as diverse as the high-grade Kauri market and corporate debt.

Virgin Australia (Virgin)’s second Australian dollar bond deal built on the success of its initial transaction and capitalised on an increasingly positive market backdrop to broaden the issuer’s capital-markets footprint, deal sources say. The new transaction allows the issuer to refinance US dollar liabilities in its home currency.

A 26 February speech by Reserve Bank of New Zealand (RBNZ) deputy governor, Geoff Bascand, suggests local banks face a tough task in persuading the regulator to rethink its recent proposals for a significant increase to capital requirements. Consultation on the proposals is open and Bascand said the RBNZ will listen to responses, but his speech suggests it is comfortable with its thinking to date.

Contact Energy (Contact) became the first corporate borrower to price a green bond in New Zealand on 22 February. Deal sources say the transaction benefited from greater-than-expected support from domestic retail and offshore institutional investors, and is reflective of continually growing momentum.

Pepper Group (Pepper) became the first non-EU issuer globally to undertake a securitisation under new European regulations via a new residential mortgage-backed securities (RMBS) deal priced on 22 February. The issuer says extensive work was needed to get to grips with the regulations, which were still being finalised as Pepper marketed the deal.