News
The week ending September 16 saw the first non-government domestic deal flow in the Australian market since late July, with two new credit issues pricing. Semi-government issuance remained at a trickle with one new deal completed, while the New Zealand primary market also saw one new bank transaction.
The amendment to Australia's Banking Act that will pave the way for a domestic covered bonds regime has now cleared the parliamentary process, having passed through the upper house on the nod on October 13 and received royal assent on October 17. The bill completed its passage through the lower house – with bipartisan support – on October 12 and was immediately fast-tracked in the Senate.
Three more days without domestic credit issuance will see the Australian bond market surpass its longest deal flow drought of the crisis era. No new transactions have priced – outside the semi-government, and supranational, sovereign and agency (SSA) Kangaroo sectors – in Australia since July 22 this year and aggregate annual volume has fallen behind record levels for the first time in 2011.
Tasmanian Public Finance Corporation (Tascorp) (AA+/Aaa) launched and priced a new September 2017 fixed rate domestic deal on September 13. The transaction was upsized from a launch volume of A$500 million (US$517.1 million) to A$540 million, and priced in the middle of the indicative range at 91.5 basis points over the Australian Commonwealth government bond.
No league table-eligible transactions priced in the week ending September 9 in Australia or New Zealand. Click here to see KangaNews's league tables for bond and securitisation issuance.
Deal flow ceased in both Australia and New Zealand in the week ending September 9, with no non-government issuance in either country. Primary market volume in Australia has not extended beyond the semi-government and high-grade Kangaroo sectors for over a month – the last domestic credit transaction in the Australian domestic public market priced on August 2.
Following the publication of the New South Wales (NSW) state budget on September 6, NSW Treasury Corporation (TCorp) released its revised funding target for the 2011/12 financial year ending June 30 next year. The requirement, at A$10.2 billion (US$10.7 billion), is A$1.3 billion lower than the previous estimate made at the turn of the financial year thanks to an equivalent reduction in forecast client funding, to A$4 billion.
Based on its view that Australian authorised deposit-taking institutions (ADIs) are "well placed to meet the new global minimum capital requirements" set out by Basel III guidelines, the Australian Prudential Regulation Authority (APRA) is seeking an accelerated implementation timetable for the local regime. The proposals were set out in a consultation paper published by APRA on September 6.
Continued slow issuance conditions in the week ending September 2 did not prevent a change at the top of combined asset class intermediary league table in Australia. However, with just A$1.25 billion (US$1.32 billion) priced in the week, all of it from either semi-government or triple-A rated Kangaroo issuers, the gap between the top two intermediary banks could be closed by a single transaction.
On September 5 ANZ National Bank (ANZ National) (Aa3/AA-) announced an offer of unsecured, unsubordinated bonds. The potential issue will be the first retail offering of ANZ National bonds since July 2010, when the bank issued a NZ$350 million (US$294.7 million) five-year line.