News
Colonial First State Global Asset Management (CFS) priced the first Australian commercial mortgage-backed securities (CMBS) deal for over six months on March 18, with the leads claiming "heavy oversubscription" allowed an early close. The deal, for A$370 million (US$341.29 million), wholly refinances a June 2010 maturity from the same issuer.
The third Kangaroo deal in two days priced on March 18, with European Investment Bank (EIB) (AAA/Aaa/AAA) adding A$600 million (US$553.8 million) to its April 2015 line to bring the total issue size to A$2.1 billion. The tap came to market at 59.75 basis points over the April 2015 Australian government bond or 29 basis points over semi-quarterly swap.
Following a recent debt investor update, on March 18 Mirvac (BBB) launched a five-year domestic deal with minimum size of A$100 million (US$92.21 million). While the issuer has two domestic maturities in 2010 it is also understood to be comfortably funded and only to be seeking a relatively limited volume in the latest transaction.
The residential mortgage-backed securities (RMBS) transaction priced by Bendigo and Adelaide Bank (BEN) on March 17 was upsized by A$450 million (US$413.42 million) to a final volume of A$1.1 billion. The transaction – Torrens Series 2010-1 (Torrens 2010-1) – also saw a significant scaling of investment from the Australian Office of Financial Management (AOFM).
The new April 2016 benchmark line priced by New South Wales Treasury Corporation (TCorp) on March 17 saw nearly twice as much demand in its book than the A$1 billion (US$918.5 million) final deal size. The deal came in towards the tighter end of its indicative pricing range and just inside levels predicted by analysts at launch a day earlier.
Recent concerns over European sovereign risk do not appear to have dampened demand for European issuers from the supranational, sovereign and agency (SSA) sector in the Kangaroo market, with KfW Bankengruppe (KfW) (AAA/Aaa/AAA) and Council of Europe Development Bank (CEB) both pricing deals on March 17. Combined volume on the two trades was A$475 million (436.38 million).
Investec Bank Australia (Investec) (Baa2/BBB) became the most recent bank to add tenor to its Australian maturity profile with the March 16 pricing of A$300 million (US$274.5 million) of government-guaranteed bonds. The issuer says while the demand for unguaranteed, longer-maturity issuance from smaller banks remains unknown it made sense to secure five-year funding under guarantee before the scheme's March-end expiry.
The long-anticipated reopening of the Australian corporate bond pipeline commenced on March 15 with Transurban (A-/Baa1/A-) selling A$250 million (US$228.38 million) of four-year, fixed-rate medium-term notes (MTNs) as part of a planned extension of its maturity profile. A number of other issuers are also understood to be close to bringing deals to market, with a refinancing from Adelaide Airport (BBB/Baa2) the latest mooted offering.
Analysts say the new April 2016 line launched by New South Wales Treasury Corporation (TCorp) (AAA/Aaa/AAA) on March 16 should offer a margin slightly above swap to offer fair value and maximise investor interest. Marketing range for the deal is understood to be 50-55 basis points over the April 2015 Commonwealth government securities (CGS), with 51 basis points over being the equivalent of flat to semi-semi swap.
The Australian market continues to receive financial institution (FI) issuers warmly; one week after pricing the first two Kangaroo FIs in three years, Credit Suisse Sydney Branch (Credit Suisse) (A+/Aa1) demonstrated on March 11 that investors are as keen on debuts as they are on resurrections, while BNP Paribas Australia Branch (BNP Paribas Australia) (AA/Aa2/AA) also issued unguaranteed paper. Meanwhile the domestic securitisation market continues to fire and the year's first corporate deal is close to pricing.
ING Bank Australia (ING Bank) (A+) has taken advantage of late demand for government guaranteed paper in Australia to place a trio of transactions in advance of the guarantee's expiry at the end of March. Most recently, the issuer added A$150 million (US$137.16 million) to its August 2013 line in a UBS Investment Bank-led deal that priced at 22 basis points over swap on March 10.
In a March 10 announcement, Kiwibank (AA-) said it was "considering" making an offer of up to NZ$100 million (US$70.55 million) – with room for an upsize of up to a further NZ$50 million – of perpetual callable preference shares, which will provide the bank with tier one capital. Market sources say the transaction is likely to open in April with ANZ as lead arranger.