News
Wholesale tier-two transactions from the major banks, at least in public benchmark format, have been few and far between in the Australian market in recent years. This has created a scarcity-of-supply dynamic which, along with recent redemptions, resulted in significant demand for Westpac Banking Corporation (Westpac)’s latest tier-two benchmark.
Scaling up and broadening supply through globally harmonised issuance standards will be a key goal for the international green-bond industry in the coming years, according to market participants at the leading international forum for the sector. Asia’s significance as a source and target of issuance is only set to grow.
Avanti Finance (Avanti) priced a rare New Zealand residential mortgage-backed securities (RMBS) transaction on 12 June, in a NZ$200 million (US$140.7 million) deal arranged by Westpac New Zealand (Westpac). With a limited universe of local RMBS against which to compare, deal sources say the similarities between the Australian and New Zealand markets came into play.
On 13 June, following the release of the Queensland state budget the day before, Queensland Treasury Corporation (QTC) revealed a A$8 billion (US$6.1 billion) borrowing requirement for the 2018/19 financial year. This is approximately A$1.8 billion less than the forecast given in the 2017/18 borrowing programme.
Firstmac printed its second residential mortgage-backed securities (RMBS) transaction of 2018, Firstmac Mortgage Funding Trust No. 4 Series 2-2018 (Firstmac 2-2018), on 8 June. The A$1 billion (US$760.6 million) deal was led by ANZ and J.P. Morgan. The transaction was predominantly placed with Japanese investors according to James Austin, chief financial officer at Firstmac in Brisbane, who spoke to KangaNews shortly after the deal priced.
After a prolific start to 2018, long-end Kangaroo issuance from supranational, sovereign and agency (SSA) issuers has tailed off significantly in recent months, with sizeable transactional volumes seen through the first months of the year reverting back to the small- and medium-sized deals which have previously characterised the market. European Investment Bank (EIB)’s recent deal bucks this trend.
Housing New Zealand (Housing NZ) returned to the New Zealand debt capital market for the first time since 1999 with a NZ$500 million (US$351.2 million) dual-tranche transaction on 1 June. Deal sources suggest the addition of another high-grade issuer in the New Zealand dollar market is a boon for market development, particularly due to the nature of the institution and its intent to be a repeat issuer.
The key to unlocking a new level of green issuance in the Australian bond market could be a deeper understanding of the assets on banks’ balance sheets. Institutional assets lend themselves to classification and verification, while the potential of SME and household loans remains almost untapped.
Western Australia (WA)’s second state budget in eight months, delivered on 8 May, revealed promising signs of improvement for the state’s finances. In an address hosted by Western Australian Treasury Corporation in Sydney on 31 May, state treasurer Ben Wyatt cited public expense reform, improving commodity prices and the emergence of lithium as a major export, as key factors in what he describes as the best WA budget position across forward estimates since the 2012/13 budget.
The results of the eighth iteration of the KangaNews Fixed-Income Research Poll, the only independent, specialist poll of fixed-income investors' views on research in the Australian market, are supported by a record number of responses for the third consecutive year in 2018. More than 100 qualifying votes were received from institutional investors. KangaNews is pleased to reveal the full suite of 2018's winners.
National Australia Bank (NAB) aims to free up regulatory capital for additional renewable-energy lending by funding part of its existing loan portfolio via an external trust vehicle. While investor demand makes renewables particularly suitable for this type of transaction, NAB also believes it could be applied elsewhere in the institutional balance sheet.
The Kangaroo market has traditionally been a diversification play for global borrowers with substantial funding tasks, but Austria’s Hypo Vorarlberg Bank (Hypo VBG) (A/A3) believes the Australian dollar option can be a perfect fit for its profile as a relatively small but innovative issuer.