News
A slight deterioration to South Australia (SA)'s fiscal position leaves the South Australian Government Financing Authority (SAFA) with an upcoming funding task only marginally changed from the previous year. Elsewhere, analysts claim SA will continue to underperform the national economy.
Firstmac priced a residential mortgage-backed securities (RMBS) transaction backed by prime Australian residential mortgages on June 19. The offering is denominated in Australian dollars and US dollars and was offered in 144A and Reg S format.
Fonterra Co-operative Group (Fonterra) priced a new benchmark transaction in the Australian dollar market on June 20. The new seven-year deal is Fonterra's second Kangaroo line after it printed A$175 million (US$164.5 million) of 10-year bonds in February this year. That transaction priced at 105 basis points over swap and was indicated at around 89 basis points on Yieldbroker ratesheets on June 18.
FlexiGroup priced its first Flexi ABS Trust series Australian asset-backed securities (ABS) issue of 2014 on June 20, with expected ratings having been assigned to the new deal on June 16.
Mighty River Power (Mighty River) (BBB+) completed the bookbuild on its retail subordinated capital bonds offering on June 17. At the same time, the minimum interest rate was set at 6.80 per cent, the tight end of the previously announced 6.8-7.0 per cent marketing range.
The extension of the AUD component of Barclays' global aggregate index to capture deals down to a minimum A$100 million (US$94 million) was driven chiefly by client demand and is not part of a drive to capture benchmark index market share in Australia, the index provider says. Barclays launched its new Australian Aggregate A$100 million Index on June 17.
The term-funding requirement in New South Wales Treasury Corporation (TCorp)'s FY 2014/15 borrowing programme, released on June 18 following the New South Wales (NSW) state budget, is A$2.5 billion (US$2.33 billion) lower than previous expectations. The progress of the state's asset-sale plan will further shape the future direction of state finances, including TCorp's funding strategy.
On June 18, ANZ Banking Group (ANZ) priced a new self-led Basel III-compliant Australian dollar benchmark tier-two transaction. According to KangaNews data, Westpac Banking Corporation became the first of Australia's big-four banks to price a purely wholesale tier-two deal under Basel III rules on March 7 this year. That A$1 billion (US$939 million), 10-year floating rate note (FRN) transaction – with a non-call-five structure – priced at 205 basis points over bank bills (BBSW).
On June 18, Rentenbank (AAA/Aaa/AAA) priced an increase to its March 2019 Kauri line. According to KangaNews data, the line was introduced on February 27 this year at a volume of NZ$400 million (US$346.5 million) and pricing of 75.8 basis points over New Zealand government bond (NZGB).
On June 17, World Bank (AAA/Aaa) priced a dual-tranche transaction in the Kangaroo market. The announcement follows hard on the heels of World Bank pricing a NZ$800 million (US$695.1 million) tap to its 2019 Kauri line on June 13, in what was the Kauri market's largest-ever deal.
Plenary Group (NR) issued its wholesale corporate bond issue for up to A$35 million (US$32.7 million) on June 17. The seven-year amortising bond pays a coupon of 7.5 per cent and is underpinned by eight Australian public-private partnership (PPP) projects.