News
The Australian Office of Financial Management (AOFM) says healthy demand for its latest syndicated deal – predominantly from domestic accounts – drove record volume. The AOFM priced a new A$7 billion (US$6.3 billion) 12-year syndicated issue on March 12 in a transaction which surpassed the Australian market's record deal volume – a 20-year A$5.9 billion deal also placed by the AOFM, in November last year.
The Australian market saw big volume in the second week in March. The Basel III compliant tier-two space continues to grow with Insurance Australia Group pricing the third new-style tier-two deal fo the year, and the first from an insurance company. Another notable deal was the Australian Office of Financial Management's A$7 billion Treasury bond transaction, which stands as the largest-ever AUD syndication.
On March 13, Bank of Tokyo-Mitsubishi UFJ Sydney Branch (BoTM) (A+/Aa3) priced a new four-year domestic line, which extends the borrower's curve beyond its currently longest outstanding maturity of September 2017. According to KangaNews data, BoTM priced this deal, which was also its most recent transaction in the domestic market, in September 2013 for a volume of A$650 million (US$583.1 million) and pricing of 110 basis points over bank bill swap rate.
The Basel III compliant tier-two space has grown significantly since the beginning of the year with solidly supported transactions from Bendigo and Adelaide Bank (BEN) and Westpac Banking Corporation (Westpac). However, the successful completion of Australia's first new-style tier-two transaction from an insurance company is the most innovative yet, bankers say.
The Australian Office of Financial Management (AOFM) disclosed the sale of four more AB tranches of its residential mortgage-backed securities (RMBS) portfolio on March 13, confirming at the same time that its holdings of these mezzanine notes will reach zero by April 14.
Insurance Australia Group (IAG) (AA-) – through its subsidiary Insurance Australia Limited – priced a new domestic deal which is expected to qualify as tier-two compliant capital under Basel III rules. The transaction, which has ANZ and J.P. Morgan as its leads, is Australia's first new-style tier-two deal from an insurance company.
The Reserve Bank of New Zealand (RBNZ) raised the official cash rate (OCR) by 25 basis points to 2.75 per cent on March 13, in line with analyst and market expectations. The bank is the first developed-world central bank to raise rates in this cycle. Strategists and economists interpret the firm language in the accompanying monetary policy statement (MPS) as demonstrative of a "need for follow-up OCR increases".
National Bank of Abu Dhabi (NBAD) (AA-/Aa3/AA-) priced its second-ever Kangaroo transaction on March 12, with the issuer placing a new five-year transaction. NBAD made its Kangaroo debut in February last year, selling A$300 million (US$270.5 million) of five-year, fixed-rate notes in what the issuer told KangaNews it hoped would be the first step towards regular issuance.