News
On August 20, KfW Bankengruppe (KfW) (AAA/Aaa/AAA) priced a new 10.5-year Kangaroo deal in what is the borrower's 12th Australian dollar transaction for 2014. According to KangaNews data, KfW most recently visited the market in June with a A$150 million (US$139.8 million) tap to its March 2024 line at pricing of 53.75 basis points over Australian government bond.
On August 19, ME Bank (BBB+/A3) priced a new A$300 million (US$278.8 million) - upsized from A$150 million at launch - tier-two floating-rate transaction following a series of domestic investor updates the preceding week. This is the second issue of new-style tier-two securities from an Australian bank outside the big four.
On August 19, Wells Fargo & Company (Wells Fargo) (A+/A2/AA-) launched and priced a new A$100 million (US$93.2 million) minimum senior-unsecured 10-year Kangaroo deal. The borrower last visited the Australian dollar market earlier this month on August 1 for a dual-tranche, five-year transaction with total volume of A$900 million and pricing of 85 basis points over swap.
On August 19, Inter-American Development Bank (IADB) priced the sixth increase of its existing August 2024 Kangaroo bond. According to KangaNews data, the line was introduced in February this year before being increased three times in March, then again in June and July. The most recent increase on July 29 was for a volume of A$125 million (US$116.3 million) and pricing of 55.75 basis points over Australian government bond.
African Development Bank (AfDB) (AAA/Aaa/AAA) launched and priced a new five-year Kauri transaction on August 19, in what is the issuer's first deal in New Zealand since February 2008 according to KangaNews data. It is also the first Kauri to price in the second half of this year, following a record first half which saw more than NZ$5 billion (US$4.2 billion) placed.
Despite cash flow fluctuations noted between New Zealand's 2014 budget and the Treasury's August 19 pre-election economic and fiscal update (PREFU) the sovereign's borrowing needs are unchanged. Analysts say the continued fiscal path could lead to an improved funding profile and keeps New Zealand in its position as an outperforming sovereign.
KangaNews has published extensive in-depth coverage of Australia's financial system inquiry (FSI), from the submission stage through to the latest news update: the release, on July 15, of the FSI's interim report. All the relevant articles are collected on this page, which will also continue to be updated as the inquiry progresses towards its final report, government response and implementation.
A scattering of deal flow was seen on either side of the Tasman Sea during the second full week of August. Meanwhile, the KangaNews monthly league-table focus saw Canadian-origin intermediaries retain the top two positions in the Kangaroo league tables.
On August 14, Queensland Treasury Corporation (QTC) (AA+/Aa1) priced a A$1 billion (US$929.8 million) increase to its July 2023 domestic benchmark. According to KangaNews data, this is QTC's fourth syndicated transaction of the year so far.
In a report published on August 14, economists from ANZ argue that the protracted period of low non-mining business investment in Australia may finally be coming to an end. The report argues that a combination of "supportive longer term structural drivers and an improvement in near-term indicators" is coming into play, including business sentiment starting to follow its US equivalent into a cyclical upswing.