News
On November 14 Rentenbank (AAA/Aaa/AAA) added A$150 million (US$156.7 million) to its March 2022 bond, taking the total outstanding volume in this line to A$750 million. The tap takes Rentenbank's Kangaroo issuance volume to A$1.4 billion so far this year, which remains well short of the record A$2.65 billion it placed in 2011.
Non-financial corporate issuance in Australia is set for an all-time record volume month in November 2012 having surpassed the record for full-year issuance by early in the fourth quarter. More than A$10 billion (US$10.4 billion) of true corporate bonds had come to market in 2012 by mid-November, the first time the Australian market has ever reached this milestone without the contribution of credit-wrapped paper.
KfW Bankengruppe (KfW) (AAA/Aaa/AAA) priced its 12th Kangaroo transaction of the year on November 14, pricing a A$350 million (US$362.9 million) tap to its August 2017 line, taking the total outstanding to A$1 billion. KfW has been, by some distance, the busiest issuer in the Kangaroo market so far in 2012, having placed A$4.6 billion in advance of pricing on this new transaction.
Kiwibank set the margin on its offer of tier two subordinated bonds on November 13, at the same time confirming that the whole NZ$150 million (US$122.9 million) volume of the offer had been reserved during the bookbuild process with no public pool to be offered. The deal's margin is 277 basis points over bank bills, equating to a coupon of 5.8 per cent until the rate reset date of December 15 2017.
Provisional ratings have been assigned to a new residential mortgage-backed securities (RMBS) issue originated by Bank of Queensland (BOQ). The transaction, REDS Trust Series 2012-1E (REDS 2012-1E), will be the bank's first RMBS issue since August 2010 according to KangaNews data – although it placed a sterling- and Australian dollar-denominated non-mortgage securitisation in June this year.
On November 8 Telstra Corporation (Telstra) (A/A2/A) returned to the domestic market with a new five-year, A$750 million (US$779.9 million) benchmark line. Lead managers say the deal – which was upsized from a launch volume of A$500 million – was supported by a strong international bid and numerous domestic accounts.
Corporate deal flow continued in the Australian domestic market, with three transactions pricing in the week, with the highlight being the return to domestic issuance of Telstra Corporation. There were also single deals in the Australian securitisation, financial institution and Kangaroo sectors. In New Zealand, Kiwibank launched a subordinated bond.
On November 9 Westpac Banking Corporation (Westpac) became the second of the Australian big four to open a substantial offer to buy back its outstanding government-guaranteed debt; National Australia Bank (NAB) closed its buyback the day before. Westpac's offer covers A$4.9 billion (US$5.1 billion) of domestic notes maturing in March and November 2014.
A third of HSBC Sydney Branch's A$750 million (US$780.8 million) dual-tranche five-year notes, which priced on November 7, was sold to investors in Asia according to lead managers. The transaction was the bank's second domestic issue in 2012, following its A$500 million three-year issue in February.
On November 8 National Australia Bank (NAB) completed its offer to buy back all its remaining AUD-denominated Australian government-guaranteed bonds with remaining maturities of longer than a year, having repurchased around A$2.84 billion (US$2.95 billion) of the A$4.16 billion previously outstanding. At the same time, the bank also bought back around US$1.66 billion of government-backed paper.
Pepper Australia (Pepper) priced a prime residential mortgage-backed securities (RMBS) deal on November 8, including in the transaction a US$200 million hard-bullet tranche. The security, Pepper Prime 2012-1 Trust, consists of a collateral pool of 2,476 residential loans, which were originated by GE Capital and acquired by Pepper in August 2011, as of the pool cut-off date.
Bank of Queensland (BOQ) (BBB+/Baa1/BBB+) launched an transaction for convertible preference shares (CPS) in conjunction with a reinvestment offer for its Perpetual Equity Preference Shares (PEPS) on November 7. The bank intends to raise about A$200 million (US$208.1 million) to qualify as tier one capital under the Australian Prudential Regulation Authority's Basel III framework.