News
Diverse deal flow continued in the past week with the Australian securitisation market a focus of activity. Two new residential mortgage-backed securities transactions priced – one of them a nonconforming issue – as well as a brace of Kangaroos, a bank deal and one corporate issue in each of Australia and New Zealand.
The return to the Australian domestic market by Rabobank Nederland Australia Branch (Rabobank) on March 14 came slightly later in the year than the bank has historically issued thanks to improving sentiment. The borrower tells KangaNews it wanted to take advantage of ongoing spread contraction, and thanks to pre-funding at group level it was able to hold back until mid-March.
Interest in high-yielding Australian dollar income assets is increasingly driving issuance opportunities for unrated borrowers. Demand is being found in the high net worth, private banking and middle market sectors on- and offshore, paving the way for successful transactions issued under retail and wholesale documentation.
On March 14, Rabobank Nederland Australia Branch (Rabobank Australia) (AA/Aaa/AA) priced a new domestic senior unsecured issue. The issuer matched its goal of placing 2017 maturity notes, for volume of A$650 million (US$674.7 million).
A supportive local wholesale investor base made the New Zealand dollar option the most attractive source of long-tenor funds for Transpower at the time of its recent 10- and 15-year issue, the borrower says. New Zealand's corporate market has now seen three transactions in 2013 and there is cautious optimism that a solid year of issuance could develop.
Australia's first nonconforming residential mortgage-backed securities (RMBS) deal of 2013 priced on March 14, as Liberty Financial (Liberty) closed a nine-tranche issue which matched its indicative total volume of A$200 million (US$206 million). The deal follows recent prime RMBS transactions introduced by Origin Mortgage Management Services and Resimac.
The first transaction of the year in New Zealand's retail bond market priced on March 13 as Transpower (AA-/A1) issued NZ$150 million (US$123.8 million) in a dual-tranche deal. Transpower successfully placed maturities in March 2023 and March 2028 though it has not disclosed whether it is targeting specific volume in either.
On March 13 Resimac priced its largest residential mortgage-backed securities (RMBS) issue since 2006, selling an equivalent total of A$750 million (US$773.9 million) in a mixed US and Australian dollar issue. The previous largest issue by Resimac, which priced in September 2006, has equivalent total volume of A$1.36 billion with its largest tranche denominated in euros.
On March 12, Rentenbank (AAA/Aaa/AAA) priced an increase of its 4.25 per cent January 24 2023 Kangaroo line. The tap is the second increase of the line which was introduced in January 2013 at a volume of A$400 million (US$411.1 million) with pricing of 111.5 basis points over Australian government bonds.
On March 12, Powercor Australia (Powercor) (A-/A3) launched and priced a new deal in the Australian market, in the issuer's first public domestic transaction since March last year. The November 2015 floating rate issue priced at its indicative pricing margin of 100 basis points over bank bill swap rate.
On March 12, African Development Bank (AfDB) (AAA/Aaa) priced a A$200 million (US$205.7 million) increase of its 3.5 per cent January 31 2018 Kangaroo line. The tap is the first increase of the line, which was introduced in January 2013 at a volume of A$300 million with pricing of 70.75 basis points over January 2018 Australian government bond.
Financials and high-grade borrowers took over the primary markets in Australia and New Zealand in the past week. Deal flow came from local financial institutions – in senior and securitised format – as well as a clutch of supranational, sovereign and agency (SSA) names from both Europe and Australia.