News

In what will be its debut issue in the Kangaroo market, Metropolitan Life Insurance Company (MetLife) (AA-/Aa3/AA-) launched a new five-year transaction on September 18. According to KangaNews data, the deal will be the first non-bank financial institution (FI) Kangaroo since Swiss Re placed a hybrid issue in April 2007.

The Australian asset-backed securities market continued to see deal flow as ME Bank priced its SMHL 2012-2 transaction, and Investec Bank returned with Impala Trust No 1 Sub-series 2012-1. The second week of September also saw two small Kangaroo taps, though Australasian markets were otherwise subdued. Fitch downgraded Queensland one notch after the new government released its budget.

Australia's most recent issue of residential mortgage-backed securities (RMBS) was completed with a headline margin 20 basis points tighter than other recent transactions. While the new deal's issuer and leads say improving breadth and depth of demand helped the tightening take place, they also point to a strong structure and pool of loans supporting the RMBS as assisting factors.

A Queensland state budget that projects A$7.8 billion (US$8.1 billion) of fiscal consolidation over the next three years – and which sparked protests in Brisbane about proposed public sector job cuts – was not enough to prevent Fitch Ratings (Fitch) downgrading the state by one notch to AA stable. The agency says it does not expect Queensland to return to a positive operating balance by the end of the 2013/14 fiscal year despite the government's contrary forecast.

In the wake of the delivery of the new state government's first budget on September 11, Queensland's state treasurer highlights fiscal consolidation and the transfer of much infrastructure spending to the private sector as key pillars of the government's goal of regaining a triple-A rating. In an exclusive interview with KangaNews, state treasurer, Tim Nicholls, says expenditure, revenue and structural changes are all in place to reverse Queensland's fiscal path.

Commonwealth Bank of Australia (CommBank) raised the equivalent of A$4.6 billion (US$4.8 billion) in a brace of oversubscribed deals in two days this week, which the bank says puts it comfortably on the way to meeting this year's funding requirement. CommBank sold US$3.25 billion bonds in the US market through a three-tranche senior unsecured issue on September 11, and priced A$1.5 billion in its domestic tier one hybrid offering the following day.

Queensland Treasury Corporation (QTC) revealed a projected borrowing programme of A$18.7 billion (US$19.6 billion) for the 2012/13 financial year on September 12, the day after the new Queensland government's first state budget. The agency ascribes the resulting A$3.2 billion reduction in borrowing expectation to the state government's "commitment to reduce expenditure and to achieve a fiscal balance in 2014/15".

Investec Bank Australia returned to the asset-backed securities (ABS) market with its first transaction of the year on September 14, pricing the Impala Trust No 1 Sub-series 2012-1. The deal is backed by a range of auto and equipment receivables from health and accounting industry professionals, totalling A$232.53 million (US$246.04 million).

On September 10, the New Zealand Debt Management Office (NZDMO) reconfirmed the three intermediary banks who will act as joint leads on its long-awaited return to the inflation-linked bond market. However, while revealing that the next linker to be issued by the New Zealand sovereign is "likely to have" a maturity date of September 20 2025, the debt management agency also said it will not issue prior to October 1 this year.