News
The New Zealand Debt Management Office (NZDMO)'s funding programme for 2013/14 has been reduced – by NZ$2 billion (US$1.7 billion), to NZ$8 billion – following New Zealand's half-year economic and fiscal update (HYEFU). The funding update, which was published on December 17, reaffirms the NZDMO's commitment to issuing up to NZ$5 billion of its current-year requirement in the form of inflation-indexed bonds (IIBs).
Treasury Corporation of Victoria (TCV) updated its funding programme for the 2013/14 financial year on December 16, following the December 13 publication of the state of Victoria's budget update. The revised programme reduces TCV's expected funding volume for the current financial year, to A$6.06 billion (US$5.42 billion) from the previous forecast – released in May this year – of A$6.69 billion.
The December slowdown appears finally to have arrived, with deal activity limited on both sides of the Tasman Sea. St.George Bank priced the largest transaction of the week in the form of a new auto-backed securitisation while the Australian corporate market, now at annual record volume, kept the fires burning.
Mitsubishi Corporation (Mitsubishi) became the record 15th corporate issuer to debut in the Australian domestic market in 2013 when it priced a A$300 million (US$270.4 million) five-year transaction on December 10. Bonds priced at a negative concession to the borrower's more established global curves, which intermediaries say will likely attract the attention of other Asian-origin issuers.
St.George Bank (St.George) priced its first Crusade series Australian asset-backed securities (ABS) issue of 2013. Crusade Series 2013-1 Trust Australian ABS (Crusade 2013-1) has a six-tranche structure with a volume of A$1 billion (US$901.4 million), which was upsized from A$500 million at launch.
Following the release of the New South Wales (NSW) government's mid-year budget review on December 12, NSW Treasury Corporation (TCorp) published an updated annual funding requirement unchanged from that projected following the state budget in June. This is despite what one analyst report describes as a further "modest deterioration" in NSW finances.
On December 12, Global Switch Property (Australia) (BBB/Baa3/BBB) priced its inaugural seven-year deal in the domestic market.
On December 11, GMT Bond Issuer (BBB) – the financing entity of Goodman Property Trust – priced NZ$100 million (US$82.9 million) of seven-year bonds.
The debut bond issue by Federation Centres Finance (Federation Centres) – of A$150 million (US$136.4 million) on December 6 – is the first step in a capital markets plan which the issuer hopes will see it place at least four times as much volume into the bond market in the coming years. Although the domestic market was the best fit for the firm's debut, it has explored three other capital markets and plans to diversify its funding further in future.
MC Finance Australia (Mitsubishi Corp) (A+/A1) priced its inaugural deal in the domestic market on December 10. Mitsubishi Corp signed a A$2 billion debt issuance programme on November 26.
Asset allocation within Australia's managed funds industry continued to see withdrawals from domestic fixed income in the third quarter, according to data published by Morningstar on December 10. In fact, withdrawals increased relative to the preceding quarter, despite Q2's activity being sparked by US tapering speculation which appeared to have passed by the time of the most recent data set.