News
After a subdued start to the week for fixed income issuance a number of sectors have started firing in Australia, with the announcement of two new asset-backed securities (ABS) deals, two Kangaroo taps, one agency issue, and three domestic bank deals all having come to the market in the past seven days.
Citigroup (A/A3/A+) re-bought a total of A$1.2 billion (US$1.2 billion) of its Australian government-guaranteed June 2012 bond line at an equivalent margin of 5 basis points over swap on November 5. The buyback – of A$412.7 million of fixed rate paper and A$786.5 million of floating rate notes – accounts for the majority of the line, which was issued in a A$1.3 billion transaction in June 2009 and was not subsequently tapped.
The Australasian securitisation market burst into life at the start of the month with three forthcoming transactions having preliminary ratings confirmed on the same day, November 4. Australian Central Credit Union (ACCU) is planning a residential mortgage-backed securities (RMBS) deal, while Macquarie Leasing and Motor Trade Finances are closing in asset-backed securities (ABS) transactions in Australia and New Zealand respectively.
The first Kangaroo deals of the month came from Council of Europe Development Bank (CEB) (AAA/Aaa) and Rentenbank (AAA/Aaa/AAA), who both increased long-dated lines on November 5. CEB increased its October 2020 Kangaroo by A$200 million (US$202.9 million), taking the total volume outstanding to A$500 million, while Rentenbank added A$250 million to its April 2017 bond.
Export Finance and Insurance Corporation (EFIC) (AAA) issued a new A$500 million (US$502.65 million) 10-year domestic bond on November 4, which was upsized from a launch volume of A$300 million. The new deal sees EFIC return to the Australian market in which it debuted as a public issuer with the 2009 pricing of a A$500 million two-tranche fixed and floating rate three-year transaction.
New South Wales Treasury Corporation (TCorp) increased the size of its domestic and global exchangeable dealer panels to 14 member banks on November 1 with the addition of Bank of America Merrill Lynch (BAML) to both. BAML is the second new intermediary to be added to TCorp's panels this year, following the accession of BNP Paribas in mid-August.
After an extended quiet period, the New Zealand corporate market has seen activity resume of late with TrustPower (NR) closing a deal, Goodman Fielder New Zealand (Goodman Fielder NZ) (NR) completing its own bookbuild and APN Media NZ (APN) (NR) also having a transaction on the way. Market participants say retail investor credit appetite has never wavered, with the recent influx of deals resulting from issuer's decisions to take advantage of favourable domestic conditions.
On October 29, National Australia Bank (NAB) (AA/Aa1/AA) priced a new A$1.35 billion (US$1.32 billion) five-year fixed and floating rate domestic deal in the first domestic benchmark of that duration issued by a big four bank since June. The fixed rate tranche has a volume of A$550 million and priced at 167.5 basis points over the April 2015 ACGB, and the A$800 million floating rate tranche priced at 120 basis points over bank bill swap rate (BBSW).
Goodman Fielder New Zealand (Goodman Fielder) (NR) announced on October 26 that it has completed the bookbuild of its forthcoming issue of May 2016 maturity bonds having upsized the offer to its maximum volume of NZ$250 million (US$187.9 million). The transaction has also had its interest rate set at the higher of 7.25 per cent or the benchmark swap rate on November 18 this year plus 280 basis points.
Dexus Wholesale Property Fund (DWPF) (A) issued its debut Australian bond transaction on October 28, pricing a A$250 million (US$243.1 million) November 2015 line. The transaction, which is the second Australian bond to come come from the property sector in recent weeks, was increased from an initial volume of A$200 million.