News
On August 18 UBS Australia Branch (UBS Australia) (A+/Aa3/A+) priced a new three-year deal having upsized to A$1.25 billion (US$1.13 billion) from a launch target of A$500 million. This transaction is UBS Australia's first domestic issue and the fourth Australian market deal in two weeks to come from the domestic branch of an international parent bank.
Five months after roadshowing in Australia with a desire to become a regular issuer in the market, on August 18 Kommuninvest (AAA/Aaa) priced its debut Kangaroo transaction. The Swedish local government funding agency issued a A$200 million August 2015 bond, in what was the second Kangaroo debutant from the supranational, sovereign and agency (SSA) sector in 2010.
Lead managers on the six-year issue launched by Greenstone Energy (Greenstone) (NR) on August 13 say that although the issuer is an unrated credit, they believe the familiar name of the company combined with pent-up retail demand will attract investors in large numbers. Greenstone is offering a minimum of NZ$100 million (US$70.1 million) in the deal with room to upsize by up to the same amount.
On August 17, HSBC Sydney Branch (HSBC Sydney) (AA/Aa2/AA) priced A$500 million (US$448.8 million) in a three-year fixed rate transaction – its first issue in two years. The bonds priced at their indicative margin of 95 basis points over semi-quarterly swap, having launched the day before.
On August 16, Bank of Queensland (BOQ) launched its second residential mortgage-backed securities (RMBS) transaction of 2010, in what is also likely to become the first large RMBS deal in Australia since early July. BOQ's Series 2010-2 REDS deal has an indicative volume of A$750 million (US$669.7 million) and is expected to price by August 19.
Two recent benchmark-sized transactions from Australian branches of international banks have revived speculation about a return of offshore banks as issuers in Kangaroo format. However, while there are hopes of broader Kangaroo issuance before the end of the year market participants say there are still enough headwinds to make the return of financial institutions (FI) unlikely as an imminent prospect.
Australia Pacific Airports Melbourne (Melbourne Airport) (A-/A3) says a positive reaction to its recent roadshow and a desire to refinance well ahead of maturities led to the August 13 pricing of A$350 million (US$315.2 million) of four- and six-year paper. The issuer also says its position as the highest-rated Australian airport made it an appealing credit for investors.
Volkswagen Financial Services Australia (VW Australia) (A-/A3) launched and priced its fourth domestic medium-term note (MTN) issue since June last year on August 12, upsizing the three-year deal to A$125 million (US$112.2 million) from A$100 million. The deal becomes the first Australian corporate issue in August, although market sources say the corporate pipeline is strong and another transaction has already launched.