News
On February 19, CitiPower (BBB+) priced a new five-year, senior unsecured floating-rate transaction in the Australian market on February 20. The deal was upsized to A$150 million (US$134.2 million) from its minimum of A$100 million at launch a day earlier.
Recent syndicated transactions completed by South Australian Government Financing Authority (SAFA) and Western Australian Treasury Corporation (WATC) provide a clear illustration of demand dynamics in the semi-government sector. The books for SAFA's six-year floating-rate note (FRN) and WATC's four-year, fixed-rate transaction differed substantially.
Fonterra Co-operative Group (Fonterra) (A+/AA-) priced a 10-year Kangaroo transaction on February 19 for volume of A$175 million (US$157.7 million). The company accompanied the deal with a combined NZ$250 million (US$207.5 million) of domestic issuance in six- and eight-year tranches.
On February 19, World Bank (AAA/Aaa) priced a new five-year New Zealand dollar line. According to KangaNews data, the deal is the borrower's first transaction in the Kauri market since August 2013 when it priced a NZ$350 million (US$292.9 million) increase to its February 2018 line. That deal priced at 64.8 basis points over New Zealand government bond.
On February 19, the South Australian Government Financing Authority (SAFA) (AA/Aa1) priced a new floating-rate February 2020 transaction in the Australian domestic market. This comes hard on the heels of the announcement of a new four-year fixed-rate benchmark syndication made by Western Australian Treasury Corporation (WATC) a day earlier.
Financial institution (FI) deal flow in the Australian domestic market has started to pick up. It was slow to get off the mark in 2014, partly due to the competitiveness of offshore pricing. While bank funding executives agree that relative pricing between domestic and international options is little changed from the start of the year, solid investor appetite for Australian-dollar paper is drawing them to issue at home.
African Development Bank (AfDB) (AAA/Aaa/AAA) priced a new five-year Kangaroo transaction on February 18, in what will be the issuer's first Australian-market deal to price in 2014. The new bond fits into the mid-point of AfDB's fixed-rate Kangaroo curve: it has outstanding lines maturing in 2016, 2018, 2022 and 2024 according to KangaNews data.
On February 18, Western Australian Treasury Corporation (WATC) (AA+/Aaa) priced a new fixed-rate October 2018 transaction in the domestic market in what is the borrower's first syndicated deal of the year. According to KangaNews data, WATC priced its previous syndicated domestic deal on December 5, a four-year floating rate note issue with a volume of A$600 million (US$542.8 million) and pricing of 12 basis points over bank bill swap rate.
Fonterra Co-operative Group (Fonterra) (A+/AA-) has announced the launch of a dual-maturity domestic deal, comprising a minimum of NZ$100 million (US$83.6 million) in each of its six- and eight-year tranches.
On February 19, KfW Bankengruppe (KfW) (AAA/Aaa/AAA) priced a third increase of its A$700 million (US$632.6 million) March 2024 Kangaroo line. According to KangaNews data, the line was introduced in September 2013 with a volume of A$300 million and pricing of 93.5 basis points over Australian government bonds (ACGB).
Sky Network Television (Sky) (NR) revealed on February 18 that it is considering a retail bond offering of up to NZ$100 million (US$83.6 million), with full details of the seven-year offer expected to be confirmed in the subsequent two weeks. This will likely be the first new corporate bond transaction the New Zealand market this year; on February 13 Contact Energy (Contact) (BBB) confirmed a replacement offer for its retail bonds maturing on May 15 this year.