News
Sumitomo Mitsui Banking Corporation Sydney Branch (SMBC Sydney) (A+/Aa3) launched and priced a new three-year floating-rate Australian dollar deal on August 27, in the borrower's first visit to the market in 2014.
On August 27, Bank of America (BoA) (A-/Baa2/A) priced a new March 2020 fixed- and floating-rate Australian dollar transaction. According to KangaNews data, this is the first time the borrower has issued a Kangaroo deal since it priced A$425 million (US$394.5 million) of fixed- and A$425 million of floating-rate notes in May 2013. That 5.25-year dual-tranche deal priced at 142 basis points over swap.
New South Wales Treasury Corporation (TCorp) (AAA/Aaa) priced its new May 2026 syndicated deal on August 27. The A$800 million deal was upped from a minimum of A$500 million guidance at launch.
Moody's Investors Service (Moody's) downgraded its rating on the state of Western Australia (WA) – and on Western Australian Treasury Corporation (WATC) – to Aa1 on August 25, based on the rating agency's belief in a growing risk that WA's deteriorating debt metrics and ongoing deficit position "may not be reversed soon". Moody's also changed its outlook on the state's rating, to stable from negative.
Australian and New Zealand deal flow picked up during the week under review. UBS Australia Branch priced its second-ever senior-unsecured dual-tranche domestic deal and ME Bank's new tier-two transaction marked another turning point for Basel III-friendly issuance in Australia.
On August 22, National Australia Bank (NAB) (AA-/Aa2) priced a new self-led, senior-unsecured Australian dollar benchmark transaction with 5.25 year tenor.
Province of Manitoba (Manitoba) (AA/Aa1) mandated and priced a new 10.5-year Australian dollar deal on August 21, in what is the issuer's third visit to the Kangaroo market so far in 2014. According to KangaNews data, Manitoba most recently visited Australia on April 2 with a A$50 million (US$46.4 million) tap to its September 2023 line. That deal had pricing of 74.5 basis points over Australian government bond (ACGB).
Kiwibank (A+/Aa3/AA) will meet debt investors in Australia and Asia at the start of next month, ahead of the October 20 maturity of its only outstanding Kangaroo bond. Kiwibank issued A$250 million (US$232.2 million) in a five-year Kangaroo guaranteed by the New Zealand government in 2009, making it the only financial-institution issuer to price a Kangaroo in that year.
Investor comfort around new-style Basel III-friendly tier-two issuance continues to grow at a steady pace in Australia, the market's most-recent issuer says. The latest transaction, from ME Bank, potentially paves the way for a previously untested new sector to come to the market which could help feed burgeoning demand for these instruments.
On August 20, UBS Australia Branch (UBS Australia) (A/A2/A) priced a new dual-tranche five-year, senior-unsecured, benchmark transaction in the Australian domestic market. This is UBS Australia's second public issue in the Australian domestic market, after a A$1.25 billion (US$1.17 billion) dual-tranche deal issued in 2010.
On August 20, New South Wales Treasury Corporation (TCorp) revised its annual borrowing programme for 2014-15. TCorp's new term-funding requirement for the year is revised down to A$5.5 billion (US$5.1 billion) from A$6.3 billion, with the revision due to the state's A$1.5 billion sale of Macquarie Generation to AGL Energy.