News

Kommunalbanken Norway (KBN) (AAA/Aaa) completed a A$275 million (US$254.65 million) increase to its October 2014 line on January 15, pricing the deal at 102 basis points over the June 2014 Australian government bond or 55 basis points over swap according to lead managers ANZ and Nomura.

The A$450 million (US$416.48 million) increase to KfW Bankengruppe (KfW)'s January 2012 Kangaroo bond that priced on January 19 brought the size of the line to A$2.1 billion, making it the issuer's first A$2 billion-plus line in the market and the joint third-largest Kangaroo outstanding. KfW is also just the second Kangaroo-issuing institution to have a bond of this size on issue.

The Australian government has welcomed a report by the forum it established to help secure Australia's future as a financial services centre, in which the development of the retail bond market is a key pillar. The report, published by Australian Financial Centre Forum (AFCF) on January 15, recommends a simplified retail issuance regime for local and international corporates, government institutions and supranationals.

On January 18 European Investment Bank (EIB) (AAA/Aaa/AAA) launched an increase to its August 2013 Kangaroo bond, which with A$2.5 billion (US$2.3 billion) outstanding prior to the tap pricing is already the largest Kangaroo on issue. EIB is also the biggest borrower in the market, with its A$13.6 billion of bonds on issue putting it over A$3 billion clear of its nearest rival.

In a relatively quiet week for offshore issuance from Australasian names the most apparent trend was the reopening of currency markets outside the US dollar, with transactions priced in Canadian dollars, Swiss francs and – with easily the most volume – yen. However, despite Westpac Banking Corporation (Westpac)'s (AA/Aa1/AA-) ¥111.3 billion (US$1.22 billion) Samurai deal there was, for once, more Kangaroo market activity than issuance going offshore.

Supranational, sovereign and agency (SSA) Kangaroo deal flow continued on January 14, with three more deals pricing for a total of A$700 million (US$650.65 million) and a fourth expected to complete a day later. Kangaroo volume for January has now reached A$3.75 billion across nine priced deals, with six issuers – all from the SSA sector – active to date.

Council of Europe Development Bank (CEB) (AAA/Aaa/AAA) became the sixth issuer to return to the Kangaroo market so far in 2010 with the January 13 launch of an increase to its September 2014 line. There has already been A$3.05 billion (US$2.81 billion) of Kangaroos priced this year, all from supranational, sovereign and agency (SSA) issuers, in six transactions.

Asian Development Bank (ADB) (AAA/Aaa) headlined another busy day in the Kangaroo market on January 12 with the inauguration of a A$1 billion (US$927 million) January 2015 bond. The market was also tapped by KfW Bankengruppe (KfW) (AAA/Aaa/AAA), which priced a A$300 million increase to its August 2013 maturity – the issuer's second transaction in less than a week.

Volume in the Kangaroo markets looks set to hit a record for the first month of the year as KfW Bankengruppe (KfW) (AAA/Aaa/AAA) launched its second deal of 2010 – a A$300 million (US$278.97 million) minimum increase to its August 2013 line – on January 11. Already A$1.75 billion of Kangaroos has come to market this year and with two more deals preparing to price the January record issuance of A$2.625 billion, from 2008, is under threat.

The fair wind for supranational, sovereign and agency (SSA) Kangaroo deal flow in the first weeks of the year continued on January 11 as the Asian Development Bank (ADB) (AAA/Aaa/AAA) launched a new January 2015 bond – the first new Kangaroo line to be brought to market in 2010. So far, A$1.75 billion has priced in four Kangaroo taps since the first deal on January 6.

In the absence of any domestic deal activity from local issuers, the first full week of 2010 has been dominated in the Australian market by the familiar sight of local banks' activity in the US market being only partly offset by Kangaroo flow. In total, three US deals from Australian banks netted US$5.75 billion while four Kangaroo transactions accounted for A$1.75 billion (US1.6 billion).

Kangaroo primary market volume reached A$1.75 billion (US$1.6 billion) in the nascent new year on January 8 as Rentenbank (AAA/Aaa/AAA) added A$200 million to its July 2014 line, bringing its total size to A$1.2 billion. The transaction is the fourth Kangaroo deal to price in just three days, with all the deals to date being increases to existing 2014 or 2019 lines.