News
The AUD market opened for 2014 on January 6, with Rentenbank (AAA/Aaa/AAA) mandating a tap to its April 2024 Kangaroo issue and Kommunalbanken Norway (KBN) (AAA/Aaa), readying a new 10.5-year Kangaroo line.
The Australian Prudential Regulation Authority (APRA) published an information paper on December 23, laying out its framework for dealing with Australia's domestic systemically important banks (D-SIBs). Under this regime, D-SIBs will be subject to an extra 1 per cent common equity tier one (CET1) requirement as the local higher loss absorbency (HLA) treatment – which APRA says is "at the lower end of the range used elsewhere".
The Australian Prudential Regulation Authority (APRA) released its final position on the local interpretation of Basel III liquidity coverage ratio (LCR) rules on December 20. The new regime is little changed from that proposed by APRA in advance of its most recent consultation on the subject. But the regulator has fallen into line with the global regulatory calendar by temporarily shelving its planning on the net stable funding ratio (NSFR).
Contact Energy (Contact) revealed on December 20 that it is considering a retail bond offer in the New Zealand domestic market, to open in February 2014. The offer will be for "approximately" NZ$225 million (US$184.5 million) of senior debt, and will come ahead of the company's outstanding NZ$534 million maturity in May 2014.
Deal flow slowed to a virtual halt heading into the end of 2013, with only one deal priced each in Australia and New Zealand. Meanwhile activity in the ratings world ramped up with the proposed acquistion by Insurance Australia Group of Wesfarmers' insurance division and APA Group's proposed takeover of Envestra.
Queensland Treasury Corporation (QTC) became the latest of Australia's semi-government funding agencies to release its mid-year update, on December 19, revealing a A$1 billion (US$883.4 million) decline in its expected task for the current year. The reduction, to A$6.1 billion of expected term funding, is based on "better operating performance in the general government sector, lower borrowing requirements across government and use of surplus liquidity".
On December 18, AMP completed its retail-format tier-two transaction, also revealing that it has upsized the offer to a final A$325 million (US$289.7 million) sum. This was the second time the transaction was increased during marketing – the initial A$200 million launch size having been upped to A$300 million minimum on November 11.
Global Switch Property (Australia) (Global Switch) priced its inaugural seven-year A$100 million (US$89.2 million) Australian domestic deal on December 12, shortly after it visited the sterling market with a £350 million (US$569.6 million) nine-year deal on December 4. The borrower tells KangaNews it had always planning to issue in the two markets to both increase investor diversification and match its capital requirements.
Following the federal government's mid-year economic and fiscal outlook update (MYEFO), the Australian Office of Financial Management (AOFM) has increased its borrowing programme for 2013/14. Analysts are more concerned about the government's budget update given a stark revision in what has been a relatively stable global period, and expect rating agencies to hint at a desire to see a medium-term plan to protect Australia's triple-A rating.
National Australia Bank (NAB) has completed its new tier-one hybrid security offer in the domestic retail market. Having already doubled the volume of the Convertible Preference Shares II offer, to A$1.5 billion (US$1.3 billion) from an initial A$750 million, the bank disclosed that the securityholder and general offer brought final volume to A$1.72 billion.