News
Participants at the Finance and Treasury Association (FTA)'s annual congress, which took place in Brisbane on November 19-21, have been impressed by the new depth and reliability of the AUD bond market. The main funding-related concern of treasurers appears to be the potential impact of regulation on the cost of capital, with derivatives reporting in particular coming under fire.
On November 21, the European Investment Bank (EIB) (AAA/Aaa/AAA) priced a new long five-year deal in the Australian market. According to KangaNews data, the issuer last priced a deal in the Kangaroo market in March 2013 which had a volume of A$200 million (US$187.9 million) and pricing of 137.3 basis points over Australian government bond.
Following fixed-income investor briefings during October and November, Airservices Australia (AsA) (AAA by Standard & Poor's) launched and priced a new seven-year domestic transaction on November 21.
The probability of strong post-pricing performance drove strong domestic investor interest in Anglo American's debut Kangaroo deal – enabling the deal to be doubled in size. In fact it could easily have been bigger still if it were not for the intraday execution strategy – but even so market participants agree the deal is positive for the continued development of the Australian market.
On November 20, Anglo American Capital (Anglo American) (BBB/Baa2) priced a new A$500 million (US$235.7 million) five-year issue – its debut bond in the Kangaroo market.
The latest issue of senior bonds by an unrated Australian corporate was announced on November 20, as Payce Consolidated (Payce) disclosed plans to issue up to A$50 million (US$46.7 million) of five-year notes. As with previous such deals – most recently from PMP – the forthcoming transaction is being arranged by FIIG Securities (FIIG).
On November 20, ING Bank Sydney Branch (ING Sydney) (A+/A2/A+) priced a new five-year Australian dollar benchmark transaction. According to KangaNews data, the issuer's previous domestic bond deal priced in August this year – the dual-tranche issue had a total volume of A$750 million (US$702.5 million) with pricing of 120 basis points over swap.
The Australian Office of Financial Management (AOFM) priced a new A$5.9 billion (US$5.53 billion) 2033 syndicated issue on November 19 in what was the largest ever Australian dollar bond deal to date – the AOFM and Queensland Treasury Corporation both previously issued the largest volume at A$4 billion in May 2013 and February 2011 respectively.
The Australian Office of Financial Management (AOFM) priced a 4.5 per cent April 2033 bond via syndication on November 19. The new line extends the nominal AOFM curve by four years, from the current longest dated maturity of April 2029.