News
A panoply of deals was again brought by Australian and New Zealand issuers this week, as momentum kicked on in various markets. Intermediaries are hopeful that opportunities for further issuance in Australia will continue to rise, especially in the corporate and asset-backed sectors, while on the other side of the Tasman, a long hoped-for resurgence in Kauri activity is meeting rising demand.
Investa Funds Management (Investa) (A-), as responsible entity for Investa Commercial Property Fund (ICPF), issued a new A$250 million (US$261.9 million) domestic five-year transaction on May 25. The deal was upsized from a launch volume of A$200 million and priced in line with guidance at 145 basis points over swap.
Western Australian Treasury Corporation (WATC) (AAA/Aaa) has announced a mildly increased borrowing programme of A$16.1 billion (US$17 billion) for 2011/12 following the release of the state of Western Australia (WA)'s budget for the next financial year. WATC has no plans to issue inflation-linked bonds domestically as yet, but tells KangaNews that offshore currency issuance is gradually becoming more likely.
Preliminary ratings have been assigned to the second non-residential mortgage asset backed securities (ABS) deal of the year, as Capital Finance Australia (Capital Finance) prepares a forthcoming transaction with a launch volume of A$551.2 million (US$582.7 million). Bella Trust No. 2 Series 2011-1 is targeted towards offshore investors with the inclusion of a GBP-denominated tranche.
On May 24, European Investment Bank (EIB) (AAA/Aaa/AAA) priced a new A$500 million (US$527.3 million) 10-year Kangaroo bond. The new transaction extends EIB's maturity profile and is the borrower's first Kangaroo transaction since February when it priced a A$400 million May 2014 tap.
Suncorp Metway (Suncorp) (A+/A1/A+) issued a new A$650 million (US$686.1 million) domestic May 2014 floating rate bond on May 24. It is the second public debt offering from a regional bank this year, and the first in senior unsecured format. The transaction follows a A$200 million lower tier two subordinated issue from Bank of Queensland (BBB+/A2/BB+) on May 5.
Deal flow ramped up across a diversity of sectors in both the Australian and New Zealand markets this week, as a range of issuers took advantage of continually improving market conditions. With some of those sectors only now opening up, most market participants expect the flood of issuance to continue as the end of the financial year approaches.
Fitch Ratings (Fitch) shook the securitisation market on May 17 when it released a proposal to change the criteria for lenders' mortgage insurance (LMI) in residential mortgage-backed securities (RMBS) transactions. While the rating agency tells KangaNews LMI will still have a firm place in RMBS structures, issuers acknowledge an openness to alternate configurations going forward.