News
The interim report of Australia's financial-system inquiry (FSI) describes a range of headwinds to the further development of a domestic corporate bond market in Australia and asks for further information on a number of issues. However, its policy options – which, the report stresses, are not recommendations – are relatively limited and focus on the retail market.
The second week of July saw a number of notable deals from returning or new borrowers. Motor Trade Finances priced a rare New Zealand dollar securitisation and Credit Suisse Sydney priced its first domestic deal since 2010. Commonwealth Bank of Australia closed the week with a new A$2.25 billion (US$2.11 billion), dual-tranche domestic benchmark deal, while the biggest news of the week was likely the jumbo European debut of Scentre Group.
Commonwealth Bank of Australia (CommBank) (AA-/Aa2/AA-) launched and priced a new self-led October 2019 Australian dollar benchmark transaction on July 11. According to KangaNews data, the borrower priced its previous Australian dollar senior unsecured domestic deal in April this year.
Kiwi Income Property Trust (KIP) completed the bookbuild on its NZ$125 million (US$110.1 million) seven-year, fixed-rate bond deal on July 10. The unrated, retail-format bonds will be issued by KIP's manager, Kiwi Property Management, which says demand was sufficient to reserve the full NZ$100 million deal size plus NZ$25 million of oversubscriptions from bookbuild participant clients.
Telstra Corporation (Telstra) acknowledges that its return to the syndicated-loan market for the first time in five years may have come at a premium over capital-market pricing. But the borrower says the scale and flexibility of its new A$1.5 billion (US$1.4 billion), three-year loan signed on July 9 made it the obvious choice to fill a gap in its curve.
KangaNews is proud to reveal the results of its 2014 Fixed-Income Research Poll, in which Australian institutional investors were asked to vote for the best research providers across a range of sectors relevant to their market. The poll – the fourth run by KangaNews – saw a first-time winner in the overall category as well as continued strong performance from some of the market's most-respected analysts.
Credit Suisse Sydney Branch (Credit Suisse Sydney) (A/A1/A) priced a new five-year Australian dollar benchmark transaction on July 10. According to KangaNews data, the transaction is the first time the borrower has visited the market since August 2010 when it priced a A$600 million (US$564.7 million) five-year floating-rate note deal. That transaction had pricing of 158 basis points over bank bill swap rate.
Scentre Group (Scentre) (A/A1) – the entity formed out of the old Westfield Retail Trust (WRT) and Westfield Group (Westfield)'s remaining assets in Australia and New Zealand – has quickly established a bond curve, placing €1.6 billion (US$2.2 billion) and £400 million (US$685.3 million) in a four-tranche deal on July 8. The transaction does not fully refinance a substantial bridge facility entered by the issuer, though Scentre tells KangaNews there is no rush to return to capital markets.
On July 8, Rentenbank (AAA/Aaa/AAA) mandated and priced an increase to its January 2025 Kangaroo line. According to KangaNews data, the deal is the first tap to the line which was introduced on July 2 this year at a volume of A$200 million (US$187.4 million) and pricing of 62 basis points over Australian government bond.
KfW Bankengruppe (KfW) – the Kangaroo market's largest single issuer – introduced its green-bond programme on July 7. However, the prospect of KfW following World Bank into issuance of the product in the Kangaroo market seems to be a longer-term one, as the agency tells KangaNews it expects to debut in euros and plans initially to concentrate on that market and US dollars.