News
The second full week in August saw deal flow in Australia continue with four new transactions and one tap while deal flow in New Zealand remained at a standstill. Most notably, ING Bank Sydney Branch returned to the market with a new dual-tranche A$750 million issue while domestic triple-B flow continued with a debut deal from Incitec Pivot.
On August 16 ING Bank Sydney Branch (ING Sydney) (A+/A2/A+) priced a new domestic bond transaction. According to KangaNews data, the issuer last visited the domestic bond market in senior unsecured guise in November last year, when it brought a A$175 million (US$160.2 million) 2.5-year dual-tranche transaction.
Auckland Council responded to reverse enquiry to price the equal longest-dated transaction it has ever issued on August 14, placing NOK1.4 billion (US$237.7 million) of September 2028 paper. Despite the deal's significant contribution to the issuer's annual funding task, however, the council tells KangaNews it does not plan to alter its existing on- and offshore funding strategy for the year ahead.
Annual results released by Commonwealth Bank of Australia (CommBank) on August 14 suggest the premium paid by the bank for deposits relative to wholesale funding has continued to widen. By the end of June 2013, CommBank reports the increase in the margin it pays for deposits relative to pre-financial crisis levels has been 64 basis points greater than the equivalent increase in wholesale funding costs.
On August 14, Incitec Pivot (IPL) (BBB/Baa3/BBB) priced a new A$200 million (US$182.006 million) fixed rate 5.5-year deal in the Australian domestic market. KangaNews understands the launch follows IPL's recent round of investor updates.
Pepper Australia (Pepper) issued its first prime residential mortgage-backed securities (RMBS) deal in 2013 – a mixed tranche US dollar and Australian dollar deal – as part of its plans to gain greater exposure to the international investor base. The deal's currency mix was reweighted in favour of Australian dollar notes, but the issuer tells KangaNews all tranches were oversubscribed.
Reverse enquiry and additional duration led ANZ Banking Group (ANZ) to tap the domestic bond market on two consecutive days last week, the issuer says. ANZ followed a A$1.75 billion (US$1.6 billion) four-year senior unsecured floating rate note (FRN) transaction on August 8 with a A$700 million 10-year covered bond – an inaugural maturity in the domestic covered bond market – a day later.
A lack of explicit future policy direction immediately following the Reserve Bank of Australia (RBA)'s August 6 decision to cut rates by 25 basis points left market observers divided. Analyst reaction to the RBA's subsequent statement on monetary policy (SMP), released on August 9, was equally split, with some predicting an October rate cut and others adopting a wait-and-see position.
A brace of new transactions from ANZ Banking Group highlighted the first full week in August, as the bank followed its return to the Australian senior unsecured benchmark market with its first domestic covered bond since March last year. Elsewhere, primary market activity was limited to small transactions in the high-grade Kangaroo market and a dual-currency securitisation issue.
Pepper Australia (Pepper) priced a A$500 million prime residential mortgage-backed securities (RMBS) transaction on August 9. Pepper Prime 2013-1 Trust consists of a collateral pool of 2,500 residential loans, which were originated by GE Capital and acquired by Pepper in August 2011, according to rating agency information published on August 6.