News
In the two weeks since details of Australia's forthcoming carbon tax were announced, strategists have broadly concluded that the tax will be manageable for both directly-affected businesses and the wider economy. With some sectors expected to benefit from the new scheme, some economists say the net result could be neutral or even positive for GDP growth – though they also foresee a larger-than-projected inflationary impact.
Commonwealth Bank of Australia (CommBank) (AA/Aa2/AA) launched and priced a new A$2.5 billion (US$2.7 billion) five-year deal on July 21 in what was the first domestic benchmark transaction from a big four bank since mid June. The self-led deal was also the issuer's first transaction in the domestic market since January 13, when it priced A$2.5 billion of July 2015 notes at 105 basis points over swap.
KfW Bankengruppe (KfW) (AAA/Aaa/AAA) issued a A$550 million (US$590.1 million) tap to its May 2021 Kangaroo on July 21, taking the total amount outstanding in the line to A$1 billion. The line was introduced in May and is the longest point of the agency's Kangaroo curve.
Canadian Imperial Bank of Commerce (CIBC) (A+/Aa2, with covered bond programme ratings of AAA/Aaa/AAA) priced a new Kangaroo covered bond on July 21. The deal is CIBC's third Australian dollar covered bond, following the issuer's debut A$750 million (US$806.8 million) three-year transaction in October 2010 and, more recently, a A$700 million five-year issue in March this year. The latter was the first five-year covered bond transaction to price in the Australian market post-crisis.
Pricing has been completed on a new commercial mortgage-backed securities (CMBS) deal from Liberty Financial, the final volume of which remained at the launch figure of A$240 million (US$257.7 million). The transaction is be the second CMBS of the year, following a A$160 million issue from ALE Finance Company on April 21.
Queensland Treasury Corporation (QTC) (AA+/Aa1) used a bookbuild process for the new 10-year benchmark bond line it launched and priced on July 20. The issue was the agency's fourth syndicated transaction of 2011 and brought its total volume placed via this method in the year to date to A$9.6 billion (US$10.3 billion).
A period of nearly two weeks without a public market bond transaction in Australia ended on July 20 as Rabobank Nederland Australia Branch (Rabobank Australia) (AAA/Aaa) priced a new five-year benchmark. The margin on the floating rate notes was 115 basis points over bank bill swap rate, with pricing coming on the same day as launch.
On July 15 Macquarie Leasing issued its second asset-backed securities deal of the year to feature foreign corrency tranches. The A$633 million (US$670.4 million) equivalent deal was upsized from a launch volume of just greater than US$550 million, with the leads reporting oversubscription in all 10 public tranches.