News
The week beginning November 7 saw a pickup in deal flow across all Australian public markets. After several weeks with no primary activity, the market saw the first semi-government transaction since September and the first Kangaroo deal in two weeks. Two securitisation deals also priced, while two issues were completed across the Tasman.
Issuer name: Bank of New Zealand
Northern Territory Treasury Corporation (NTTCorp) (Aa1) launched and priced a new fixed rate November 2017 domestic transaction on November 9. The new A$500 million (US$517.9 million) deal almost completes the semi-government's annual funding task of A$796 million, and follows on from a A$200 million issue pricing on September 2.
The Australian Prudential Regulation Authority (APRA) released a consultation document on November 8, setting out both its proposed full prudential standard for covered bonds and a tightening of rules on cross-bank holdings of subordinated securitisation tranches. APRA expects its full rules relating to covered bonds to come into effect in the first quarter of 2012.
Macquarie Leasing (Macquarie) completed its fourth offshore currency asset-backed securities (ABS) transaction this year on November 11. The A$553.8 million (US$561.4 million) deal has with most of its paper – US$500 million – denominated in US dollars.
Goodman Australian Industrial Fund (GAIF) (BBB) made its inaugural US private placement (USPP) issue on November 4, selling a total of US$300 million of 10- and 12-year notes in a National Australia Bank-led deal. The issue was divided almost evenly between its two tranches, with US$158 million of 5.26 per cent 10-year notes and US$142 million of 5.41 per cent 12-year notes placed.
The issuer and lead managers of Wesfarmers' (A-/Baa1) recent A$500 million (US$519.4 million) domestic deal say the transaction's success illustrates the fact that real money investors have not changed their fundamental demand for Australian true corporate credit despite volatile markets. More than 40 investors participated in the October 31 deal, which was upsized by A$200 million.
Following on from last week's reopening of the market, the week ending November 4 saw another Australian non-financial corporate transaction. Across the Tasman, a new forthcoming retail corporate deal was announced on November 2 although the transaction has yet to be formally confirmed.
Following on from the three jumbo-sized transactions completed last month, November opened with two more billion dollar-plus Australian syndicated bank deals. Despite the preponderance of bank market debt refinancing in what remains a volatile capital markets environment, both the latest loan borrowers tell KangaNews they are confident they will return to bond issuance when markets normalise.
The race to be the first Australian bank to issue a covered bond is heating up as ANZ Banking Group (ANZ) joined National Australia Bank (NAB) in finalising ratings for its covered bond programme. NAB initially appeared to be in pole position following the seeding of its cover pool and confirmation of its programme's triple-A rating in a presale report from Fitch Ratings (Fitch) on November 2, but the ANZ programme secured triple-A ratings from Fitch and Moody's Investors Service just a day later.
Completing annual results season for Australia's big four banks on November 3, ANZ Banking Group (ANZ) continued the trend for subtly differing liquid assets strategies by disclosing a liquids portfolio in which supranational paper is included in its highest priority "class one" category. Meanwhile, the bank has run into some headwinds in its global markets business, with a second half revenue collapse ascribed to balance sheet and trading factors.
On November 22 Contact Energy (Contact) (BBB/BBB) completed the bookbuild for its subordinated retail transaction having added NZ$25 million (US$18.7 million) of oversubscriptions to the initial NZ$150 million volume. The final deal size of NZ$200 million was announced on December 20. The deal's coupon was also set at 8 per cent until the first reset date.