News

Suncorp Group (Suncorp) achieved a blowout orderbook for its wholesale tier-two transaction priced on 29 August. According to the issuer, the robust investor response was the result of scarcity of product, transparent execution strategy and an influx of liquidity in the market.

Pent-up demand led International Finance Corporation (IFC) to bring its first Kauri deal in more than a year on 28 August. According to deal sources, offshore investors have been less prevalent in Kauri deals during 2018, including in IFC’s transaction. However, issuer and intermediaries suggest the extent of domestic demand is sufficient to support further deal flow.

World Bank priced an historic bond using blockchain technology in Kangaroo format, on 23 August. Bond-I [blockchain operated new debt instrument] is the world’s first blockchain bond. The technology is still nascent, but deal participants are confident in the security of the platform and adamant of its potential to bring increased efficiency and transparency to all parts of the transaction process.

In 2017, KangaNews and Mizuho Securities hosted their first-ever roundtable discussion in Tokyo for Japanese investors in Australian dollar debt. A year later, a larger group of buy-side participants explain that, while the headwinds facing international participants in the Australian market are real, they are if anything engaged with a wider range of product than ever before.

National Australia Bank (NAB)’s first foray into the euro market for 2018 – five- and 10-year transaction in which the shorter-dated notes were green bonds – garnered a large oversubscription and tightened pricing in a busy market. Deal sources say NAB’s updated green bond programme, which now incorporates the UN Sustainable Development Goals (SDGs) played a part in the deal’s reception.

Conducive market conditions for Australia’s financial-institution issuers extended to covered bonds on 17 August, when ING Bank Australia (ING Australia) priced its debut deal in the format. Covered bonds can be viewed as a rainy-day product however deal sources say diversification and robust investor demand were the primary drivers, rather than market sentiment.

Bank Australia came to the market for its inaugural transaction on 20 August, pricing a A$125 million (US$92 million) three-year sustainability bond. The issuer tells KangaNews the nascent product was ideal for conveying its sustainability objectives, as well as attracting investors that would understand the mutual’s business model.

Global market action in the lead up to DBS Bank Australia Branch (DBS)’s latest senior transaction had little effect on the outcome, the issuer says. With market momentum reviving in the week leading up to the deal, volume and pricing were another step forward for DBS in what has become an important funding market for the bank.

Northern Territory Treasury Corporation (NTTC) added another long-dated point to its curve on 15 August, with a A$500 million (US$363.1 million) May 2030 syndicated transaction. NTTC’s Darwin-based general manager, Alex Pollon, discusses strategy as the issuer seeks to fulfil the funding requirement of the government’s capital and infrastructure commitments.

Commonwealth Bank of Australia (CommBank)’s return to the domestic market with its largest-ever senior deal highlights a sharp recovery in sentiment over the past month, the issuer says. It also suggests its strategy of providing clarity on pricing and tranching prior to launch paved the way for the substantial volume outcome.

Sustainable lending is a key pillar of ING Bank (ING)’s plans to “significantly grow its wholesale lending business in Australia”, which will also have a focus on the bank’s strengths by sector and network capabilities. A local debt capital markets presence is not on the radar at present, though ING hopes to be increasingly involved in international debt issuance from Australia as its client base grows.

Green bonds make up more than three-quarters of Australia’s impact-investment asset class by dollar volume, according to a report published by Responsible Investment Association Australasia (RIAA). The report suggests that, at A$5.8 billion (US$4.3 billion) of committed funds, impact investment remains a niche market in Australia – but one that has experienced exponential growth.