News
University of Sydney tapped into growing demand for long-dated, high-rated Australian credit with its recent 25-year deal. While it is not the first credit issuer to price ultra-long-tenor in Australian dollars, deal sources say the university’s deal achieved notably wider distribution than its predecessors and that the long-dated bid could evolve still further.
Transurban’s recent Maple bond, the first from an Australian corporate borrower in the market since 2012, came about due to the issuer’s recent acquisition of a Canadian asset. However, deal sources suggest the market could present a diversification opportunity for other Australian corporate borrowers.
The Australian Prudential Regulation Authority (APRA)’s proposals regarding total loss-absorbing capital (TLAC) for Australian banks were a key factor driving robust demand for Westpac Banking Corporation (Westpac)’s record-breaking senior deal, the issuer says. The announcement may ultimately also support spread tightening for major-bank senior debt going forward.
The scale of New South Wales (NSW)’s infrastructure task and its well-defined links with sustainable outcomes – in both the environmental and social arenas – enabled NSW Treasury Corporation (TCorp) to debut in the green-bond market with a blockbuster deal. TCorp issued A$1.8 billion (US$1.3 billion) of 10-year green bonds on 9 November.
Australia’s big-four banks could triple their issuance of tier-two instruments to meet the local equivalent of a total loss-absorbing capacity (TLAC) regime, according to the Australian Prudential Regulation Authority (APRA). The Australian regulator proposed an updated capital-adequacy regime on 8 November, suggesting tier-two will carry most of the weight of a 4-5 per cent increase in total capital requirement for the majors.
Commonwealth Bank of Australia (CommBank) launched its second additional tier-one (AT1) hybrid transaction of 2018 on November 1. Unlike its deal in March, which was focused on new money, the issuer says the priority for PERLS XI is to roll investors from its December AT1 call into this transaction. The bank expects strong demand on this basis.
Leading supranational, sovereign and agency (SSA) issuers have shared insights into the changing shape of their sector, with a focus on benchmark reform, the issuance-currency mix and evolution in sustainable debt markets. Kangaroo issuance faces some headwinds at present but SSAs see no reason why the market cannot rebound in 2019.
The Export-Import Bank of Korea (Kexim)’s A$500 million, five-year floating-rate note deal ratcheted pricing for Korea-based public issuers closer to that of Australian major-bank benchmarks. Deal sources say issuer, tenor and product scarcity were contributing factors, as well as improving investor confidence in Korean credit.
In the wake of its October debut in the Australian dollar market, Sally Ding, director, treasury and corporate finance at Heathrow Airport (Heathrow) in London, shares some honest insights about the deal execution experience in Australia relative to other global markets.
In October, Sydney Airport issued in the US private placement (USPP) market for the first time since 2014. According to Michael Momdjian, the airport’s treasurer, the deal received a blowout response with globally competitive pricing, ample Australian dollar demand and a big enough book to support a multiple-times oversubscription at final volume.
Treasury Corporation of Victoria (TCV)’s new three-year transaction was driven by liquidity management needs as the Victorian government continues to implement its working-capital efficiency project. With little issuance from the semi-government sector in this part of the curve, TCV says it was positively surprised by the diversity of investors and demand it uncovered.
Australian regulators and global industry participants have warned market users not to delay preparations for sweeping changes to international hedging markets. Meanwhile, although Australia’s bank-bill swap rate (BBSW) has survived the cull of global interbank offered rates (IBORs), local regulators are now intensifying their suggestion that one-month BBSW may no longer be suitable as a reference rate for new issuance.