News
The Victorian state government published its mid-year budget update on December 14, saying that the state remains on track to record a surplus in 2012/13 despite a projected A$1 billion (US$1.05 billion) fall in revenue over the next four years. In the wake of the budget update, Treasury Corporation of Victoria (TCV) disclosed an updated expected funding task for 2012/13 of A$7.2 billion – up by A$233 million on its expectation in May 2012.
FirstMac Mortgage Funding Trust Series 2012-3, a new residential mortgage-backed securities (RMBS) issue from FirstMac which priced on December 12, includes a A$73 million (US$76.9 million) soft bullet tranche as part of its A$440 million total volume. The deal is FirstMac's third RMBS of the year.
What could be the last 'old-style' lower tier two (LT2) subordinated debt transactions in the Australian market both attracted strong demand, as issuers and investors hurried to participate in transactions before the dawn of a new regulatory regime at the start of 2013. Market sources admit new subordinated securities, featuring explicit loss-absorbency and more equity-like features, are likely to be a harder sell in the institutional market.
On December 12, AMP Bank priced a A$150 million (US$158.2 million) new 10-year non-call five-year subordinated floating rate issue, having upsized the transaction by A$50 million from its volume at launch earlier the same day.
On December 12, ANZ Banking Group (ANZ) (AA-/Aa2/AA-) priced a new 10.5-year AUD subordinated note issue. The notes have a non-call 5.5-year structure, with a final maturity on June 19 2023. The self-led issue had volume of A$750 million (US$789.6 million) and priced at the tight end of its indicative pricing, 220-225 basis points over three-month bank bills.
On December 10, ANZ Banking Group (ANZ) became the third of the Australian big four banks to launch a public offer to buy back its domestic government-guaranteed bonds. The offer covers ANZ's only benchmark-sized Australian dollar guaranteed lines: A$2.41 billion (US$2.52 billion) of fixed and A$1.1 billion of floating-rate notes, both with maturity dates of January 16 2014 according to KangaNews data.
The first week of December did not mark the end of deal flow in Australia or New Zealand with issuance continuing in the domestic credit and high-grade markets on both sides of the Tasman, and the Australian securitisation market also re-igniting. The Reserve Bank of Australia's decision to cut the cash rate by a further 25 basis points surprised few.
A new asset-backed securities (ABS) issue priced on December 7 by Westpac Banking Corporation (Westpac) subsidiary, St.George Bank (St.George), is the first public issue of St.George ABS since 2008. The deal, which was assigned provisional ratings on December 4, was upsized to A$1.2 billion (US$1.3 billion) from indicative aggregate volume of A$726.5 million across its six tranches.
CFS Retail Property Trust (CFS Retail) (A) launched and priced a new seven-year domestic transaction on December 6; the A$100 million (US$104.5 million) deal is the issuer's second public domestic issue of the year following its placement of A$100 million in February. According to KangaNews data, the new transaction makes 2012 the first year since 2003 in which every month has seen non-financial corporate issuance in the Australian public market.
The first public residential mortgage-backed securities (RMBS) issue of 2012 from National Australia Bank (NAB) priced on December 6. The transaction, National RMBS Trust 2012-2, was doubled in size from its indicative equivalent volume of A$500 million (US$523.6 million) across four tranches, and included £85 million (US$136.8 million) of class A2, soft-bullet maturity notes.