News
United Energy Distribution (UED) (BBB/Baa2) priced a new five-year transaction on April 3, in just the second Australian domestic issue from a triple-B rated corporate this year. The new issue closed at its indicative volume of A$200 million (US$205.5 million) and price of 220 basis points over swap .
Issuer and lead managers on Australia's latest retail hybrid transaction say its structure and size helped ensure a successful outcome despite the deal coming to market shortly after the pricing of A$4.35 billion (US$4.52 billion) of retail fixed income product in a two-week spell. Insurance Australia Group (IAG) (A+) set a margin of 400 basis points over bank bill swap rate (BBSW) on its A$350 million convertible preference share (CPS) offer on March 27.
What turned into a bumper issuance quarter, following a subdued start, concluded with one more week of diverse deal flow in the Australian market. For the first time in 2012, residential mortgage-backed securities issuance added to aggregate issuance for the week, which also included semi-government, Kangaroo, and domestic bank and corporate transactions.
Caterpillar Financial Australia (Caterpillar) (A/A2/A) priced its first domestic deal of 2012 on March 29, issuing a A$100 million (US$103.7 million) new three-year bond at a margin of 95 basis points over swap. Caterpillar has been a regular Australian market borrower in recent years, issuing two transactions in each of 2010 and 2011 for a total of A$200 million and A$220 million respectively.
KfW Bankengruppe (KfW) (AAA/Aaa/AAA) cemented its position as 2012's busiest Kangaroo borrower to date on March 27 by pricing a A$700 million (US$730.9 million) increase to its July 2016 line. Following the pricing of the new issue the German agency has placed a total of A$2.55 billion in six 2012 Kangaroo deals, while no other issuer has visited the market more than twice this year.
Lloyds TSB Bank's Australia Branch (Lloyds TSB Australia) priced a new deal maturing October 3 2015, in what will be the third domestic line issued under the Lloyds name.
The Tasmanian Public Finance Corporation (Tascorp) (AA+/Aaa), has announced a A$400 million addition to its A$100 million (US$104.5 million), 6 per cent June 2020 line. This is the first time the line has been tapped via syndication since it was first issued in September 2009.
The Australian residential mortgage-backed securities (RMBS) market kicked into life on March 29 with the pricing of a transaction from ING Bank Australia. The deal, was upsized to A$800 million (US$831 million) from provisional volume of A$500 million (US$524 million), is the issuer's fourth Australian RMBS following its 2010 debut and a brace of transactions last year.
In what has become a busy week for Rentenbank (AAA/Aaa/AAA), on March 23 the German agency priced a NZ$100 million (US$81.8 million) tap of its Kauri maturing December 15 2017, having upsized the transaction by NZ$25 million from its indicative volume at launch earlier the same day.
Deal flow was steady in the week ending March 23 following several weeks of high primary market activity in both Australia and New Zealand. The week's most active borrower was Rentenbank, which capitalised on a visit to Australasia around the NZ Capital Markets Forum and the Australian DCM Summit to price two Kangaroo and one Kauri deals.