News

Deal flow picked up in the last full week of February, most notably in New Zealand where the largest Kauri transaction of all time priced for International Finance Corporation. Australia saw action from the high-grade Kangaroo space to true corporate deals, while reporting season spurred a raft of ratings actions. Meanwhile Bank of Queensland launched a buyback offer.

A new residential mortgage-backed securities (RMBS) issue by Commonwealth Bank of Australia (CommBank), Australia's third domestic securitisation transaction of the new year, priced on February 22 with an upsize to A$2.535 billion (US$2.607 billion) total volume from an initial A$750 million across its five tranches.

On February 21 Caterpillar Financial Australia (Caterpillar) (A/A2/A) launched and priced a A$200 million (US$205 million) increase to its April 10 2015 notes, upsized by A$50 million from launch.

Nordic Investment Bank (NIB) (AAA/Aaa) priced a new five-year Kangaroo deal late on February 21. The transaction is NIB's second visit to the Kangaroo market this year, following the supranational's issue of a A$100 million (US$102.4 million) increase to its 2022 bond on January 11.

Rentenbank (AAA/Aaa/AAA) priced its third Kangaroo deal of the year on February 20, disclosing plans to add to its 2023 line. The agency debuted its 2023 Kangaroo once in 2013, pricing A$400 million (US$414.6 million) at 111.5 basis points over Australian government bonds on January 17.

Bank of Queensland (BOQ) opened an offer to buy back the remaining volume of its government-guaranteed notes maturing in October this year on February 19. The offer covers the A$653 million (US$673.1 million) of floating rate notes or just over half the A$1.25 billion originally issued in the line. BOQ has already retired A$625.6 million of the line in question, in June last year.

Sumitomo Mitsui Banking Corporation Sydney Branch (SMBC Sydney) (A+/Aa3/A-) priced a new Australian dollar transaction on February 19, in the bank's second-ever domestic deal and its first since 2007. The transaction is the second of 2013 from an Asian bank's Australian branch, following Industrial and Commercial Bank of China Sydney Branch's A$650 million (US$673.4 million) three year which priced on February 5.

Record early year issuance in the Kauri market continued on February 19 as International Finance Corporation (IFC) (AAA/Aaa) – the only one of the market's four largest borrowers not to have issued previously in 2013 – priced a new five-year transaction. The deal achieved record size for a Kauri, of NZ$650 million (US$553 million)

Early engagement with the Australian investor base and the market's growing recognition of the need to offer internationally-competitive pricing helped Toyota Finance Australia (Toyota Australia) achieve both an upsize and a tight margin on its domestic issuance return, the firm's lead manager says. Toyota Australia priced A$300 million (US$309 million) in a new five-year deal, at 80 basis points over swap, on February 18.

Deal flow continues to be slow with just a single wholesale bond  transaction closing in the week to February 15 in Australia and the New Zealand public market completely silent. One substantial securitisation deal priced, the retail hyrbid market saw another launch, and the South Australian Government Finance Authority tendered a benchmark floating-rate note.

Australia's second residential mortgage-backed securities (RMBS) deal of 2013 priced on February 15, as Westpac Banking Corporation followed Bendigo and Adelaide Bank (BEN) into the securitisation market emerged. The transaction, WST Trust Series 2013-1, is a three-tranche RMBS which was upsized to aggregate volume of A$2.1 billion (US$2.2 billion) from the indicative A$750 million.