News
On October 10, ING Bank Australia (ING Australia) completed the buyback of its government-guaranteed notes maturing in June and October 2014. In total, the bank repurchased A$2.101 billion (US$1.981 billion) of the A$2.4 billion previously on issue in the three lines.
Issuer and leads of the New Zealand Debt Management Office (NZDMO)'s latest inflation-linked syndication say the deal was met by strong demand and saw a shift in weighting to offshore accounts compared with previous similar deals. The deal was upsized to NZ$2.5 billion (US$2.07 billion) at pricing on October 8, from initial guidance at launch of NZ$1-2 billion.
Virgin Australia has diversified away from more the traditional financing product favoured by airlines – the sale and leaseback – to become the first Australian-origin issuer to issue enhanced equipment notes (EENs). The issuer says it is only the fourth non-US domiciled airline to bring this type of structure and, while other Australasian carriers could follow, market participants suggest the possibility of the transaction being quickly repeated is slim.
Rentenbank (AAA/Aaa/AAA) priced an increase it its April 2024 Kangaroo line on October 9. The forthcoming transaction is the first tap to the line which was introduced on September 25 this year.
Queensland Treasury Corporation (QTC) (AA+/Aa1) priced a A$1.1 billion (US$1.04 billion) increase to its June 21 2019 benchmark on October 9. According to KangaNews data, the tap will be the first syndicated increase of the line which was introduced on August 1 2012 with a volume of A$1.65 billion at pricing of 145 basis points over the March 2019 Australian government bond.
On October 9, the New Zealand Debt Management Office (NZDMO) (AA+/Aaa/AA+) priced its new 2030 inflation-indexed bond via syndication.
On October 4 P&N Bank priced its first residential mortgage-backed securities (RMBS) transaction since November 2010 – when the bank operated under the name Police & Nurses Credit Society. P&N's Pinnacle Series Trust 2013-T1 RMBS – a securitisation of prime residential mortgages - has a total volume of A$300 million (US$282.6 million) across four tranches.
Only a handful of deals price in the Australian market in the first week of October, with activity at a standstill on the other side of the Tasman Sea. Mirvac Group Finance returned to the AUD market with a new seven-year line alongside predictions of a ramp-up in activity for the corporate bond market. Meanwhile, ME Bank's new A$1.25 billion (US$1.17 billion) line continued a run of substancial Australian residential mortgage-backed securities deals.
Lead managers on the October 3 return to domestic issuance by Mirvac Group Finance (Mirvac) predict a busy period ahead for the corporate bond issuance market. Mirvac's curve-extending, A$200 million (US$188.2 million) transaction was the issuer's first domestic deal of the year and the first Australian dollar issue from an investment-grade corporate name since Stockland Trust Management's new 2019 priced on August 30.
Relative pricing and globally-conducive market conditions combined in September to allow Australian corporate issuers to execute on planned funding diversification strategies. European markets in particular proved to be a focal point for issuance, with issuers and intermediaries saying market tone has been sufficiently positive to allow borrowers to place deals wherever their funding needs can best be matched.
A new residential mortgage-backed securities (RMBS) transaction from ME Bank, its first in 2013, priced on October 3. The transaction reached a volume of A$1.25 billion (US$1.17 billion) across four tranches.
On October 3, Metropolitan Life Global Funding I (Metlife) (AA-/Aa3/AA) priced a new five-year benchmark Kangaroo transaction. It is the borrower's second Kangaroo deal after a A$500 million (US$468.4 million) five-year priced in September 2012, at 217.5 basis points over Australian government bond.