News
Brisbane Airport Corporation (Brisbane Airport) (BBB/Baa2) priced its first domestic issue in almost five years on March 23. The July 2019 maturity has a volume of A$200 million (US$201.8 million) and a margin of 220 basis points over swap, with pricing coming on the same day as launch. The deal follows an investor update conducted in late February across Sydney, Melbourne and Brisbane.
Lloyds TSB Bank Australia Branch (Lloyds TSB Australia) (A+/Aa3/AA-) priced a new 3.5-year senior unsecured domestic deal on March 24 in what was the issuer's second domestic transaction in its current incarnation. The deal launched a day earlier and one day after the bank's parent company launched what is believed to be the first ever Kangaroo residential mortgage-backed securities deal.
Lloyds Banking Group (Lloyds) has included an Australian dollar tranche in its latest securitisation, in what is believed to be the first ever Kangaroo residential mortgage-backed securities (RMBS) deal. The transaction, Headingley RMBS 2011-1, is headlined by Australian dollar- and euro-denominated class A1 tranches with the balance made up of a further six sterling pieces.
On March 22, ETSA Utilities Finance launched and priced a new A$250 million (US$251.3 million) 5.5-year senior unsecured transaction in the Australian market, upsized from a launch size of A$200 million. The deal priced at 135 basis points over swap - 5 basis points tighter than the indicative margin. The deal comes two weeks after ETSA Utilities Finance completed an investor update in Melbourne and Sydney.
A more precise analysis of the longer-term impact of the catastrophic Japanese earthquake and subsequent nuclear plant explosions will only emerge over time. But strategists say the Australian economy and currency have significant supporting factors even in the face of such a massive-scale disaster in the country's second-largest trading partner, with potential benefits to the commodity sector to follow in the wake of spectacular short-term volatility.
On March 22 Westpac Banking Corporation (Westpac) (AA/Aa1) completed its offer to buy back up to the total volume of its March 19 2012 government-guaranteed bonds, with the bank retiring a total of A$1.5 billion (US$1.5 billion) of the original A$3.6 billion outstanding in the line. The buyback was offered at a price of 10 basis points below swap and bank bill swap rate.
The Australian market has seen a significant boost in the past week with three asset classes which have been relatively quiet so far in 2011 – the true corporate sector, covered bonds and financial institution (FI) Kangaroos – all seeing deal flow. Market participants are now focusing on how much momentum for diversity of supply will be generated by these transactions, with most believing the corporate market remains the heaviest bid.
On March 18, ME Bank priced the second Australian securitisation transaction of the week and the first in the domestic market, completing a new A$1 billion (US$995.8 million) residential mortgage-backed securities (RMBS) deal. The deal - which was upsized from a launch volume of A$599 million - follows the A$841.9 million-equivalent asset-backed securities (ABS) transaction issued by Macquarie Leasing which contained six US-dollar denominated senior tranches.
The return of Canadian Imperial Bank of Commerce (CIBC) (A+/Aa2, with covered bond programme ratings of AAA/Aaa/AAA) to the Kangaroo covered bond market has extended the duration of the asset class in Australia, with the bank pricing a new A$700 million (US$701.8 million) five-year transaction on March 11. The two previous post-crisis Kangaroo covered bonds have both been three-year deals.
The first Australian asset-backed securities (ABS) transaction of 2011 has been completed, with Macquarie Leasing pricing a new deal predominantly comprising six US dollar-denominated senior tranches alongside smaller Australian dollar pieces. The A$841.9 million (US$843.3 million) equivalent transaction was upsized from a launch volume of A$567 million, and makes Macquarie Leasing the first Australian securitiser to bring two US dollar deals since the financial crisis.