News
CFS Retail Property Trust Group (CFS Retail) (A) launched and priced an increase to its existing December 2019 domestic line on May 14. According to KangaNews data, the deal is the second tap to the line which was introduced in December 2012 at a volume of A$100 million (US$93.6 million) and pricing of 165 basis points over semi-quarterly swap.
Kiwibank set the margin on its new tier-two transaction on May 13, announcing a spread of 215 basis points over bank bills on the issue. The issuer also disclosed that the offer – which is being issued via a special-purpose vehicle (SPV), Kiwi Capital Funding – saw its entire NZ$100 million (US$86.3 million) volume subscribed by clients of bookbuild participants.
A trio of supranational, sovereign and agency Kangaroo deals were mandated on May 14, in the wake of Australia's federal budget. All the forthcoming deals are in the mid- and long-end of the curve and they offer Australian dollar investors a mix of seasoned and more infrequent names.
A day after the release of the federal budget, the Australian Office of Financial Management (AOFM) matched expectations on May 14 by revealing that its forecast nominal benchmark bond issuance task for 2014-15 is in the region of A$63 billion (US$58.9 billion) – down from the A$80 billion expected for 2013-14. The figure will be supplemented by A$4 billion of inflation-linked issuance, also down from the A$5 billion expected in the current year.
Infrastructure measures in Australia's federal budget are weighted on the side of incentivising states to recycle assets, though some new funding has been found. Government rhetoric on fiscal consolidation, meanwhile, has not fed through into radical changes to projected federal government debt in the medium term. Budget surplus is not expected in the four-year forecast period and Commonwealth government securities (CGS) on issue are projected to start falling only in 2020-21.
The sale of Australia's first-ever wholesale sub-investment-grade bond issuance signifies a deepening market for a wider range of credits, says the deal's sole lead manager. Even so, and despite a 30-plus account book for the deal, market participants agree the single transaction is unlikely to yet signify a new trend for speculative-grade domestic corporate issuance.
National Australia Bank (NAB) (AA-/Aa2) priced a new senior-unsecured, five-year Australian dollar benchmark transaction on May 12. The transaction is the borrower's second domestic deal this year and its first in senior-unsecured format.
Qantas Airways (Qantas) launched and priced a new eight-year transaction on May 12, in the first-ever Australian dollar domestic wholesale-market transaction from a sub-investment-grade rated corporate issuer. While there has been more talk in the market around higher-yielding wholesale issuance, KangaNews understands the Qantas transaction was driven by issuer specifics than a broadening of demand more generally.
Toyota Finance Australia (AA-/Aa3) priced a new five-year fixed-rate Australian dollar deal on May 12, in the market's first corporate deal launch for over a month.
Suncorp Group (Suncorp) closed its offer of convertible preference shares (CPS3) on May 8, upsizing the issue to a final A$400 million (US$375.7 million). The issuer confirms the securityholder offer was well oversubscribed and was therefore subject to scaling.