News
Renewed Eurozone volatility continues to keep a cap on Australian domestic investor participation in Kangaroo transactions, market participants say. But with a solid international bid enabling a steady flow of smaller deals from less-frequent Kangaroo borrowers, intermediaries believe the market remains functional with manageable pricing for some global borrowers.
Volatility in Europe did not halt Australian issuance as deal activity sparked to life this week. Three high-grade Kangaroos came to market along with a syndicated semi-government bond, two residential mortgage-backed securities and a New Zealand domestic transaction.
Heritage Bank (Heritage) has added to the healthy deal flow in Australia's retail fixed income market with the May 17 launch of the first senior retail transaction of the year. The bank is seeking A$125 million (US$124 million) in the five-year transaction, which is its second approach to the domestic retail market having issued A$50 million of subordinated notes in October 2009.
National Australia Bank (NAB) became the third of Australia's big four banks to price a retail hybrid or subordinated notes offer in 2012 on May 21, doubling the indicative volume of the deal to A$1 billion (US$1 billion) of tier two capital with a 10-year maturity and five-year call date. The deal priced at 275 basis points over bank bill swap rate (BBSW) or the tight end of its 10 basis point margin range.
Preliminary ratings have been assigned to a new Westpac Banking Corporation (Westpac) residential mortgage-backed securities (RMBS) issue, in what will is the first such issue from a big four bank since the same issuer placed a A$1.6 billion transaction in October last year. The new deal, Series 2012-1 WST Trust, has a volume of A$1.15 billion (US$750.8 million) across its three tranches.