News

On October 26 Nordic Investment Bank (NIB) (AAA/Aaa) issued a A$325 million (US$322.1 million) increase to the fixed rate tranche of its April 2015 Kangaroo line. The bond was first placed in March this year in a A$600 million (US$591.2 million) transaction – NIB's only Kangaroo activity so far in 2010 – with that deal split equally into fixed and floating rate notes.

None of the four largest state government funders rule out the use of syndication for their future deals despite improving market conditions and ample demand for Australian semi-government debt. The most active syndicated state borrower – Queensland Treasury Corporation (QTC) (AA+/Aa1) – draws a key distinction between the use of lead managers to consolidate federal-guaranteed bonds into standalone lines and bookbuild for new benchmarks.

Queensland Treasury Corporation (QTC) (AA+/Aa1) has announced the launch of a new state-guaranteed August 2013 benchmark line via syndication. The transaction, which is expected to price shortly after its October 20 launch, will be the state treasury corporation's fourth bookbuilt benchmark listing of 2010 – it has already placed A$9.5 billion (US$9.3 billion) via syndication this year.

International Finance Corporation (IFC) (AAA/Aaa) increased its July 2020 Kangaroo bond by A$400 million (US$393.1 million) on October 21, one day after launching. The line, which was introduced in July this year, brings the total volume outstanding to A$900 million.

Adelaide Airport (BBB/Baa2) increased its outstanding floating rate September 2015 bonds by A$50 million (US$48.8 million) on October 20. The increase was offered as a buyback of the credit-wrapped line maturing on December 15 this year, and was upsized to a capped volume from A$32.46 million at launch a day earlier.

On October 20 CFS Retail Property Trust (CFS Retail) (A) issued a new domestic deal across two maturities, pricing A$160 million (US$155.9 million) in a 3.5-year floating rate note (FRN) and A$290 million in a 5.5-year fixed rate maturity. The FRN priced at the predicted 160 basis points over bank bill swap rate (BBSW), while the fixed rate paper priced slightly tighter than the expected 190 basis points at 185 basis points over semi-swap.

Investec Bank Australia (Investec Australia) (Baa1/BBB) completed a buyback offer on its February 2012 Australian government-guaranteed bond line on October 25 having repurchased A$195 million (US$192.1 million) of paper. Final volume represents almost the entirety of the A$200 million floating rate tranche of the line, which also has A$200 million outstanding in fixed rate format.

Kangaroo issuance – already at a record level in 2010 – has exhibited an inverse relationship with the Australian dollar in recent weeks with deal flow easing as the currency has appreciated to the point where it is flirting with US dollar parity. However, Kangaroo market intermediaries say the almost unprecedented strength of the currency, taken alone, is too simple an explanation for reduced deal flow.

Queensland Treasury Corporation (QTC) (AA+/Aa1) issued a new A$1.6 billion October 2015 benchmark maturity via syndication on October 15. The new line was offered via a consolidation offer from the outstanding October 2015 benchmark; the new line is covered by state guarantee only while the existing bond carries the Australian government guarantee.