News
Firstmac’s third residential mortgage-backed securities (RMBS) deal for 2018 continues the issuer’s strategy of targeting specific jurisdictions with its transactions. The issuer tells KangaNews that demand enabled it to upsize and price competitively despite more challenging market conditions.
Extending its curve to 10 years was Housing New Zealand (Housing NZ)’s focus in its latest transaction. The issuer says conducive pricing facilitated its curve extension, which takes it into duration territory rarely seen in the New Zealand syndicated market.
Korea Development Bank (KDB) was able to execute its first Kangaroo deal since November 2015 – the first from any Korean borrower since the first half of last year – despite the deal coming at the end of a week of global market volatility. Deal sources say the issuer achieved a twice-oversubscribed book with an attractive cost of funds, which hints at a potential revival in opportunities for mid-curve Kangaroo issuance.
The first maturity of an Australian social impact bond (SIB), used to fund The Benevolent Society’s Resilient Families programme, marks an important point in the local development of the instrument, deal participants say. In particular, they point to the financial and social results as a validation of the use of SIBs to achieve social outcomes.
In September 2018, Fitch Ratings (Fitch) and KangaNews conducted their biannual Australian Fixed-Income Investor Survey for the 10th time. Survey data collected over the past half decade show the changing patterns of investor outlook – and the latest iteration zeroes in on the domestic housing market as a key risk factor.
The private debt market has been much discussed in Australia but is often defined in narrow terms – for instance as a direct equivalent of the US private placement bond market. Investors say the potential of private debt can only be seen when its true scope is revealed and the reasons for wider funding of these assets understood.
The fifth annual iteration of the KangaNews-Moody’s Investors Service (Moody’s) Corporate Borrowers Intentions Survey shows a small but significant increase in expectations for debt-capital-markets activity in the year ahead. This comes despite respondents taking a more pessimistic view of prevailing credit conditions.
The biggest issue in the New Zealand debt market has historically been shortage of domestic supply relative to a demand pool that has grown significantly in the KiwiSaver era. In September, BNZ and KangaNews convened their annual New Zealand roundtable with a specific goal in mind: to discuss whether the national infrastructure need, the emergence of bank securitisation and other factors can radically change the supply landscape.
Australia has bucked the global trend to move away from interbank offered rates (IBORs) that the market benchmarks off and on which short- and long-term funding is based. Active trading in bank bills makes the bank-bill swap rate (BBSW) a viable base rate for the long term – especially now the Australian Securities Exchange (ASX) has radically overhauled the BBSW calculation methodology as a cooperative effort with market participants.
Port of Melbourne priced the Australian market’s largest single-tranche volume for a nonfinancial corporate borrower in 2018 with its A$550 million (US$388.5 million) seven-year debut on 4 October. But establishing a significant investor base in the local market was the issuer’s main goal rather than outright volume, deal sources say.
Pepper Group (Pepper) introduced US dollars to its I-Prime residential mortgage-backed securities (RMBS) programme with its latest transaction, I-Prime 2018-2. The issuer tells KangaNews the move is designed to continue to diversify its investor base, given the scale of its funding need.
The Kauri market has been supporting significantly sized deals in recent weeks, illustrated by Asian Development Bank (ADB)’s most recent foray into the market. Pricing and demand fundamentals are currently coaxing supply from offshore issuers, with domestic buyers the primary drivers of demand.