News
New South Wales Treasury Corporation (TCorp) (AAA/Aaa/AAA) issued its second public domestic deal of the week on August 18, adding A$100 million (US$104.9 million) to its November 2025 outstanding inflation-linked bond via tender. The deal was five times oversubscribed, according to the issuer.
The Australasian markets experienced some activity this week, but as to be expected all issuance came from the high-grade sector. In New Zealand Rabobank Nederland NZ Branch (AAA/Aaa) issued a new two-tranche August 2015 bond, while in Australia all new-issuance activity came from the sovereign/semi-government sector.
New South Wales Treasury Corporation (TCorp) (AAA/Aaa/AAA) issued the first Australian public deal in nearly two weeks on August 16, taking A$810 million (US$848.6 million) in a new March 2022 bookbuilt line. According to the issuer, the deal was entirely placed with domestic investors given the short window between launch and pricing.
A silent week for syndicated domestic bond issuance on both sides of the Tasman leaves KangaNews's intermediary league tables unchanged on August 15. In both Australia and New Zealand, the aggregate league tables for all deal flow – including offshore issuers in the domestic market and self-led deals – see ANZ holding first place ahead of domestic competitors.
Global volatility put the Australasian markets on virtual hold this week. There has been no primary credit issuance from local names on- or offshore, although New South Wales Treasury Corporation announced plans to tender inflation-linked bonds on August 18. The most recent Australian domestic credit deal priced on August 2 while the Kangaroo primary market has been silent since August 4.
On August 10 Fitch Ratings (Fitch) changed its global criteria for lenders' mortgage insurance (LMI) within residential mortgage-backed securities (RMBS) transactions, with the rating agency expecting RMBS deal ratings in Australia to be the most adversely affected. The criteria confirm proposals made in an exposure draft announced by Fitch on May 17, and will require Australian and New Zealand RMBS issues to provide higher credit enhancement, beyond LMI and excess spread, to secure a Fitch rating.
Although extreme volatility is keeping primary issuance on hold across all markets, intermediaries are optimistic that the current environment is unlikely to evolve into a similar liquidity crunch for banks as seen in 2008. And market participants point out that even if another funding squeeze was to occur the Australian banks are much better prepared to weather the storm this time round.
The bank's strong funding base and advance preparations for forthcoming Basel III regulations were a focus of Commonwealth Bank of Australia (CommBank)'s annual results presentation on August 10. While CommBank has seen a marginal reduction in the average tenor of its wholesale term debt and a slight increase in the proportion of wholesale funding sourced in short-term markets, these have been offset by deposit growth.