News
Attractive pricing in offshore markets has seen the usual early-year providers of domestic AUD issuance opt to take funding outside the domestic market. While domestic AUD issuance volumes have lagged behind historical norms so far for the year, market participants tell KangaNews there is no shortage of demand and volumes are anticipated to pick up following Chinese new year.
Activity ramped up in the financial institution sector with Bendigo and Adelaide Bank bringing Australia's first wholesale-only issue of Basel III-compliant bonds and issuance finally getting underway for 2014 in the senior-unsecured sector. Elsewhere, Fonterra helped turn the spotlight back onto the Dim Sum market.
On January 23, GE Capital Australia Funding (GE Capital) (AA+/A1) priced a tap to its September 2020 domestic line. According to KangaNews data, the deal is the first increase of the line which was introduced in August 2013 with a volume of A$200 million (US$176.7 million) and pricing of 130 basis points over semi-quarterly swap.
On January 23, Rabobank Nederland Australia Branch (Rabobank Australia) (AA-/Aa2/AA-) priced a new five-year benchmark Australian dollar transaction. The senior-unsecured transaction is the first such domestic AUD deal of the year, but follows closely behind Australia's first wholesale-only issue of tier-two bank debt under Basel III rules, which was priced on January 21 by Bendigo and Adelaide Bank.
In the wake of Australia's first wholesale-only issue of tier-two bank debt under Basel III rules, the transaction's issuer and lead managers say increased investor comfort around the new-style securities supported a significant oversubscription and price tightening. Bendigo and Adelaide Bank (BEN) sold A$300 million (US$265.6 million) of tier-two notes with, according to the issuer, a 2.5 times oversubscription.
The size and tenor of the second Dim Sum bond issued by Fonterra Co-operative Group (Fonterra) highlights the significant development in the market in recent years. This development, say intermediaries, means that the market is edging closer to participants being able to access Dim Sum liquidity for global funding purposes.
On January 21, Bendigo and Adelaide Bank (BEN) (A-/A2/A-) priced a new Australian dollar subordinated benchmark 10-year non-call-five floating rate note (FRN) transaction, in the borrower's first deal of 2014. The transaction is also the first-ever Australian bank tier-two deal to be issued under Basel III rules without retail documentation.