News
On November 13, QIC Finance (Shopping Centre Fund) (A-) priced a new domestic transaction. According to KangaNews data, QIC Shopping Centre Fund opened the Australian corporate bond market for 2013 when it priced a A$100 million, 5.5-year domestic issue at 185 basis points over swap on January 18. Those bonds were seen on Yieldbroker ratesheets at 134 basis points over swap on November 12.
Following the Australian Prudential Regulation Authority (APRA)'s confirmation that Australia will soon get its own master trust securitisation regime, market participants say Australia's first master-trust deals will likely not take long to come to fruition. However, the detail of APRA's revised APS 120 will be key – and implementation may not occur until 2015.
On November 13, China Construction Bank Sydney Branch (CCB Sydney) (A/A1/A) priced its inaugural Australian dollar floating-rate note (FRN) deal. According to KangaNews data, the issuer is the sixth Asian-origin bank to issue a domestic deal through its local branch this year. Most recently on November 7, Bank of China Sydney Branch priced an Australian dollar domestic FRN transaction with a volume of A$500 million (US$469 million) and pricing of 110 basis points over bank bill swap rate.
On November 12, BP Capital Markets (BP) (A/A2), priced a new five-year benchmark Kangaroo transaction. It will be the borrower's second such issue since it debuted in the Kangaroo market in August 2012 – also a five-year issue for a volume of A$500 million (US$469.3 million) at a margin of 115 basis points over swap. With its new transaction, BP becomes the first non-financial corporate borrower ever to bring a follow-up deal to the Kangaroo market.
Western Australian Treasury Corporation (WATC) (AA+/Aaa) priced a new six-year floating-rate note (FRN) transaction via syndication on November 12. The deal is WATC's seventh bookbuilt issue of the year, according to KangaNews data, including two transactions for combined volume of A$1.3 billion (US$1.2 billion).
On November 11, International Finance Corporation (IFC) (AAA/Aaa/AAA) priced a tap to its June 2018 Kangaroo issue. This is the first tap of a A$300 million (US$281.4 million) fixed-rate line which was launched in conjunction with a A$100 million floating-rate note on May 29 this year, at 64.5 basis points over the Australian government bond (ACGB).
Global investors confirm continued interest in the Australian securitisation market, with new sources of asset-backed securities (ABS) joining prime residential mortgage-backed securities (RMBS) on the agenda. Still, concern about risk in the housing market and the knock-on effect of a Chinese slowdown remain.
The regulatory future of securitisation in Australia looks positive following constructive comments on the nature and purpose of the asset class made on November 11 by Charles Littrell, executive general manager at the Australian Prudential Regulation Authority (APRA). Included in his remarks was the confirmation that, subject to certain provisos, Australia will likely get its own master trust regime.
Fortescue Metals Group (Fortescue) has completed the repricing and amendment of its US$5 billion term loan B, reducing the facility's margin by 100 basis points and extending its duration by nearly two years. The facility's new margin is 325 basis points over Libor, and the new terms of the loan allow for a further 50 basis point reduction in the margin if Fortescue achieves a leverage ratio of 2.5 times or less.