News

Following a near four-month absence from Australian and New Zealand markets, on March 9 International Finance Corporation (IFC) (AAA/Aaa) added the pricing of a new five-year Kauri transaction to the A$1.1 billion (US$1 billion) new 2015 maturity Kangaroo it priced on March 3. The Kauri deal was for NZ$275 million (US$193.44 million) of March 2015 paper, and sold at a margin of 35 basis points to five-year government bonds or around 22 basis points over swap.

The Australian Office of Financial Management (AOFM)'s programme of serial investment in residential mortgage-backed securities (RMBS) deals commenced on March 5 as the government debt agency supported a A$673 million (US$606.04 million) issue from ME Bank. Under the serial investment scheme, AOFM will buy up to half the top-rated securities in a run of RMBS deals from five approved issuers.

A revival of the Kangaroo market for financial institutions (FIs) and 2010's second domestic benchmark for a big four Australian issuer joined the continuing flow of guaranteed deals for smaller issuers as bank bond flow ramped up significantly through the week. On March 5, HSBC Bank (HSBC) (AA/Aa2/AA) priced the second FI Kangaroo in two days – and the third in three years – with its A$1.5 billion (US$1.35 billion) 2015 maturity.

Inter American Development Bank (IADB) (AAA/Aaa) completed pricing on a A$375 million (US$338.1 million) increase to its August 2019 Kangaroo issue on March 4. The deal – IADB's fourth Kangaroo transaction of the year – brings the total outstanding in the issuer's 2019 line to A$1.1 billion out of its total A$5.95 billion in the Kangaroo market.

J.P. Morgan Chase (A+/Aa3/AA-), prised open the funding window for financial institutions (FIs) in the Kangaroo market on 4 March, pricing a five-year A$1 billion (US$901.6 million) benchmark. The transaction, which was launched on 3 March, is the first from a US FI since the same issuer sold A$950 million of fixed and floating rate five-year notes at 20 basis points over swap in June 2007.

HSBC Bank (AA/Aa2/AA) launched the second Kangaroo deal in two days on March 4, announcing that it will follow the lead of J.P. Morgan Chase (J.P. Morgan) (A+/Aa3/AA-) by selling a "benchmark size" five-year transaction, with pricing expected the day after launch. Price guidance on the transaction is 125 basis points over swap – marginally tighter than the target level on the J.P. Morgan trade.

International Finance Corporation (AAA/Aaa) achieved a significant upsize in the inauguration of its third Kangaroo line on March 3, eventually pricing A$1.1 billion (US$995.61 million) in its new March 2015 from a minimum size at the previous day's launch of A$500 million. Although this is IFC's first Kangaroo of the year it has now priced at least A$1 billion in each of the three years since its 2008 Kangaroo debut.

The long-dormant Kangaroo market for US banks reopened on March 3 as J.P. Morgan Chase (J.P. Morgan) (A+/Aa3/AA-) announced the launch of a five-year "benchmark size" transaction to price the next day. The issuer is offering fixed and floating rate tranches in the self-led deal, at price guidance of 130 basis points over swap and bank bill swap rate (BBSW).

International Finance Corporation (AAA/Aaa) launched its third Kangaroo line on March 2, announcing that it will soon price a new March 2015 bond with a minimum size of A$500 million (US$449.1 million). The issuer has priced at least A$1 billion in each of the two years since its 2008 Kangaroo debut but has yet to price an Australian deal this year.

Bank of Queensland (BOQ) (BBB+/A2/BBB+) says the A$1 billion (US$897.5 million) government guaranteed March 2015 transaction it priced on March 1 will help term out the issuer's maturity profile in an environment where unguaranteed tenor continues to be harder to achieve. The fixed- and floating-rate deal priced at 79 basis points over government securities or 35 basis points over bank bill swap rate.

One of the largest users of the government guarantee on bank funding among Australia's regional banks – Bank of Queensland (BOQ) (BBB+/A2/BBB+) – has launched a "benchmark sized" guaranteed transaction in the final month of the scheme's availability. The RBS Group Australia, UBS Investment Bank and Westpac Institutional Bank-led deal will be the second five-year guaranteed benchmark of 2010 and is expected to price in the near future.

The A$600 million (US$532.38 million) new 10-year Kangaroo transaction closed on February 25 by Asian Development Bank (ADB) (AAA/Aaa/AAA) saw the majority of bonds placed with domestic investors. The RBC Capital Markets (RBCCM) and UBS Investment Bank-led transaction priced at 78 basis points over April 2020 Australian government bonds or around 27 basis points over semi-annual swap.