News
Japanese demand for Australia dollar (AUD) issuance appears to have rebounded, which analysts and intermediaries attribute to two macro factors: relative stability between the Australian dollar and the yen, and improved yields. In addition to continued demand from life insurance investors, interest from Japanese asset managers – especially at the long end of the yield curve – has also rebounded.
Despite having raised A$5.735 billion (US$5.228 billion) from the residential mortgage-backed securities (RMBS) market in the year to date, Commonwealth Bank of Australia (CommBank) tells KangaNews in the wake of its second jumbo transaction of the year that it does not rule out bringing a third such transaction in 2013. However, it would only do so in response to genuine investor demand.
The Australian Securities and Investments Commission (ASIC) confirmed on August 20 that it plans to further tighten its oversight of hybrid securities with the goal of ensuring "these complex financial products are not mis-sold to investors". The latest ASIC report on the hybrid market was published a day after the release of data suggesting that self-managed superannuation fund (SMSF) assets have continued reweighting out of cash and into hybrids.
On August 19, Inter-American Development Bank (IADB) (AAA/Aaa/AAA) priced a tap to its May 22 2023 Kangaroo line. The tap is the first increase of a line which was introduced in May 2013 in a deal with volume A$200 million (US$ 183.7 million) and pricing of 92 basis points over Australian government bonds.
Incitec Pivot (IPL) says strong investor demand for triple-B corporate issuance in the Australian dollar market supported its debut transaction. The deal, which priced on August 14, is the eighth domestic transaction by a triple-B issuer since May this year, a trend which joint lead managers on the IPL deal attribute to improved investor sentiment and search for diversification and yield.
Commonwealth Bank of Australia (CommBank) priced its second residential mortgage-backed securities (RMBS) issue of the year on August 16. Medallion Trust Series 2013-2 has a five-tranche structure with an aggregate volume of A$3.2 billion (US$2.9 billion), from an indicative issue size of A$750 million.