News
New Zealand's improving fiscal outlook and constrained supply in the domestic market saw World Bank price the market's largest-ever single-tranche offering. At a new total volume of NZ$1.35 billion (US$1.16 billion), the line also represents the largest outstanding bond in the market.
Offshore markets have offered ideal borrowing conditions for Australian-origin corporate issuers in 2014, intermediaries say. Even so, there has been a dearth of issuance in the first five months of the year. When Brambles printed a new €500 million (US$469.1 million) 10-year deal on June 4 it became only the third Australian issuer – behind SP AusNet and Sydney Airport – to access euro-denominated funding in 2014.
The second week in June saw World Bank tap its 2019 Kauri bond by NZ$800 million (US$693.8 million) in the Kauri market's largest-ever deal. In Australia deal activity continued to tick over at a slow but steady pace with just three increases printing for a total volume of A$1.375 billion.
On June 13, KfW Bankengruppe (KfW) (AAA/Aaa/AAA) priced the sixth increase to its existing A$1.25 billion (US$1.17 billion) March 2024 Kangaroo issue. According to KangaNews data, the line was introduced in September 2013 at a volume of A$300 million and pricing of 93.5 basis points over Australian government bond (ACGB).
World Bank (AAA/Aaa) priced the Kauri market's largest-ever deal on on June 13. The deal is a A$800 million increase to it's existing NZ$550 million (US$475.2 million) Kauri bond due in February 2019.
On June 12, the Reserve Bank of New Zealand (RBNZ) lifted the official cash rate (OCR) – to 3.25 per cent, its highest level since January 2009 – for the third consecutive monetary policy meeting. The reserve bank suggests downside data surprises are balanced out by those to the upside, leading some analysts to deviate only marginally, and others not at all, from their previous expectations of a continued tightening cycle.
European Investment Bank (EIB) (AAA/Aaa/AAA) priced a new transaction in the Australian domestic market on June 11. The deal is an increase to EIB's existing A$450 million (US$421.8 milion) Kangaroo bond due August 7 2024.
Queensland Treasury Corporation (QTC) priced a syndicated increase of its existing A$1.1 billion (US$1.02 billion) July 2025 benchmark bond on June 10. According to KangaNews data, the new curve-extending line was introduced in April this year for a volume of A$1 billion and pricing of 56 basis points over Australian government bond. That deal was also the borrower's most recent syndicated transaction.
On June 6, Macquarie Leasing (Macquarie) upsized and priced its second asset-backed securities (ABS) deal of the year, and the first to include euro-denominated notes, from its SMART ABS Series automotive and equipment lease-backed programme. SMART ABS Series 2014-2E (SMART 2014-2E) has a three-tranche structure and was upsized from its indicative aggregate volume of A$500 million (US$467.9 million) equivalent.
The Australian and New Zealand domestic markets continued at a steady pace for the first full week in June. The month opened with Tasmanian Public Finance Corporation (Tascorp)'s first public syndicated deal in more than a year, closely followed by Qantas Airways' second domestic deal in less than a month.