News
The results of a recent survey of retired self-managed superannuation fund (SMSF) trustees suggest these fund holders are broadly satisfied with an asset-allocation profile which affords little weight to fixed-income product. Meanwhile, although most of the surveyed SMSF investors hold at least some fixed-income assets – and more plan to do so – there appears to be little interest in annuities.
Commonwealth Bank of Australia (CommBank)'s first residential mortgage-backed securities (RMBS) issue of the year priced on February 14. The forthcoming transaction, Medallion Trust Series 2014-1, totalled A$2.511 billion (US$2.258 billion) across five tranches – including a soft-bullet note.
Deal flow started to pick up in the second week in February. In Australia, Westpac re-opened the domestic benchmark market for major banks in 2014 with a new A$3 billion (US$2.6 billion) dual-tranche five-year issue, while Goldman Sachs Group returned to the Kangaroo market. Meanwhile in New Zealand, Westpac NZ has built the largest domestic credit bond with a tap to its 2018 line.
Goldman Sachs Group (Goldman Sachs) (A-/Baa1/A) priced a new Kangaroo dual-tranche transaction with an August 2019 maturity on February 14.
Westpac Banking Corporation (Westpac) (AA-/Aa2/AA-) priceda new, self-led five-year Australian dollar deal on February 14, becoming the first of Australia's big-four banks to launch a domestic benchmark in 2014. According to KangaNews data, the borrower's previous domestic issue was a A$900 million (US$805.1 million) covered bond placed in November last year. That deal priced at 85 basis points over semi-quarterly swap.
On February 14, Bank Nederlandse Gemeenten (BNG Bank) (AA+/Aaa/AAA) priced a new four-year line in what is the borrower's fourth Kangaroo deal in 2014. According to KangaNews data, BNG Bank last priced a deal in the Australian market on January 29. That transaction had a volume of A$25 million (US$22.3 million) and pricing of 69 basis points over semi-quarterly swap.
Westpac New Zealand (Westpac NZ) (AA-/Aa3/AA-) priced an increase to its September 2018 domestic line on February 14. The deal is the first new transaction in the New Zealand domestic market this year and gives Westpac NZ the title of holder of the largest domestic credit bond.
Infratil (NR) closed its new 6.75 per cent November 15 2019 retail deal in the New Zealand domestic market on February 14. The final volume for the transaction reached NZ$68.5 million (US$57.3 million).
Market movements around the New Zealand Debt Management Office (NZDMO)'s first 2015 benchmark buyback tender offer left the agency able to only make a small dent in the volume of what is its shortest-dated and largest outstanding bond maturity. Nonetheless, the NZDMO confirms that the result has no impact on its repurchase objective, which stretches to NZ$3 billion (NZ$2.5 billion) in total, or on its issuance projections.
On February 13, Inter-American Development Bank (IADB) (AAA/Aaa/AAA) priced a new Kangaroo bond with a 2024 maturity. The transaction is the issuer's third in the Australian market in 2014 with the earlier issues, both of which were priced in January, being increases to existing lines.
Australian activity slowed for the first week of February with three deals priced and only a handful of rating actions. The New Zealand market stood still for a second week as the country enjoyed Waitangi day. Macquarie Bank kicked off Australian securitisation deal flow for the year with a new A$1.4 billion RMBS deal, which contained two innovative features - principal payment through the life of the deal and a five-year refinance option for the issuing trust.