News

Following a tap to the line on November 10, KangaNews understands that Telstra Corporation (Telstra) (A/A2) would ultimately like to increase its June 2020 domestic bond to A$500 million (US$499.2 million). Having most recently tapped the 2020 by A$200 million, to total A$350 million, Telstra's ultimate aim with this bond is to increase it to A$500 million over time.

Issuance across the corporate and securitisation markets continued in the past week with the pricing of a pair of corporate deals and more than A$1 billion (US$997.7 million) of securitised paper, with another innovative residential mortgage-backed securities (RMBS) deal launching. Market participants note that Kangaroo deal flow is limited, but they expect consistent domestic issuance to continue as borrowers take advantage of favourable conditions that may not last into 2011.

Commonwealth Bank of Australia (CommBank) subsidiary Bankwest launched its second residential mortgage-backed securities (RMBS) transaction of 2010 on November 11, in what is also likely to be the first sizeable Australian RMBS deal to come to market without support from the Australian Office of Financial Management (AOFM) since May this year.

Rabobank Nederland Australia Branch (Rabobank Australia) (AAA/Aaa) has increased the July 2014 line it introduced in June last year. The increase, which launched and priced on November 10, is for A$275 million (US$275.8 million) to bring the floating rate tranche of the line from its previous A$725 million size to A$1 billion.

A smaller than expected Australian federal budget deficit outcome for the last completed financial year has led the Australian Office of Financial Management (AOFM) marginally to reduce its projected funding need for the 2011 financial year. The debt management agency now expects to borrow A$53-58.5 billion (US$53.2-58.7 billion) in FY11, down from a forecast A$60 billion following the federal budget in May.

Volkswagen Financial Services Australia (VW Australia) (A/A3) issued a A$100 million (US$100.3 million) increase to its August 2013 bond in what will be the issuer's fourth transaction in the Australian market this year. The tap - which was upsized from a A$50 million launch volume - brings the outstanding volume of the issuer's 2013, which was introduced in August and increased once in September, to A$250 million.

On November 10, Telstra Corporation (Telstra) (A/A2) increased its June 2020 domestic line by A$200 million (US$200.5 million), upsized from a launch volume of A$100 million. The line was inaugurated in June this year, and was Telstra's first domestic transaction in almost four years. The deal priced in line with the expected margin of 175 basis points over semi-quarterly swap – a margin 25 basis points tighter than the original trade.

Commonwealth Bank of Australia (CommBank) (AA/Aa1/AA) completed the bookbuild of its five-year retail-format senior bond offer on November 26. CommBank has confirmed a minimum A$500 million (US$481.75 million) of retail bonds will be sold to eligible brokers, with the capacity to increase the final deal volume to A$1 billion before the offer closes on December 17. The margin has been set at 105 basis points over bank bill swap rate (BBSW).

APN Media (NR) launched what many market participants expect will be the final New Zealand retail corporate transaction of 2010 on November 8, announcing the forthcoming sale of a minimum of NZ$150 million (US$118.2 million) of March 2016 bonds. The deal, which has room for an upsize of up to NZ$50 million, will have its margin set on November 12 and will be issued on December 15.

The divestment of a significant portion of Australasian assets into a new property trust will not reduce the prospects of future Westfield Group bond issuance in Australia, the firm insists. Meanwhile the new entity, Westfield Retail Trust (WRT), will seek credit ratings and is expected to look to the domestic market as its most natural source of debt funding once the rating process is complete.