News
The second hybrid deal from an Australian big four bank to launch in just over two months is a sign of returning confidence in the asset class, according to one of the leads on the latest transaction. ANZ Banking Group (ANZ) (AA/Aa1/AA) launched its CPS2 deal on November 10 seeking volume of A$750 million (US$697.13 million) with room to up- or downsize depending on demand.
The European Investment Bank (EIB) (AAA/Aaa) launched its ninth Kangaroo transaction of 2009 on November 10, with pricing on the new long five-year line expected later this week "in the context of the market" according to its leads. The issue – which will mature in April 2015 – is being lead by ANZ, Commonwealth Bank of Australia and Deutsche Bank.
Signs of returning confidence in Australia's asset-backed security (ABS) market are continuing with two deals set to price in the next week. Capital Finance, an Australian subsidiary of the British banking group Lloyd's, will issue A$621.3 million (US$574.7 million) in a debut auto loan deal to price by November 17 while ME Bank has launched its third residential mortgage-backed security (RMBS) deal of 2009, with pricing expected by the same date.
International Finance Corporation (IFC) (AAA/Aaa) says it still has capacity to return to the Kangaroo market during the financial year ending June 30 2010, even though a A$550 million (US$507.76 million) November 6 increase to its 2014 line means the issuer has priced a record A$1.8 billion in the Australian market in 2009. IFC is also willing to return with either a new line or a further increase to the 2014.
On November 6 the International Finance Corporation (IFC) (AAA/Aaa) priced a A$550 million (US$504.24 million) increase to its June 2014 Kangaroo bond. The increase came to market at 79.5 basis points over the benchmark June 2014 Australian Government bond, which rate sheet data indicates equates to the region of 20 basis points over swap.
International Finance Corporation (IFC) (AAA/Aaa) launched its third Kangaroo transaction of 2009 on November 5, with pricing on the 2014 increase expected by the end of November 6. Two representatives from the issuer recently met international and domestic investors in Australia at and around an Australasian fixed income conference part-organised by Commonwealth Bank of Australia, which is lead-managing the new deal with ANZ.
Australia's better-than-expected economic performance since the last Commonwealth budget in May will lead to a reduction of government bond issuance of up to A$10 billion (US$9.06 billion) in the rest of the 2009/10 financial year, according to a November 5 statement from the Australian Office of Financial Management (AOFM). Total issuance for the year is now expected to be A$50.2-52.2 billion instead of the expected A$60 billion.
After several weeks of slow primary markets in Australia, ANZ (AA/Aa1/AA) sold A$1.25 billion of fixed and floating rate five-year bonds in a real money-driven, unguaranteed transaction on November 5. The self-led deal is the bank's first five-year unguaranteed benchmark of 2009 and the first large domestic deal from a big four Australian bank since National Australia Bank (NAB)'s (AA/Aa1/AA) A$1.5 billion 2014 from September 9.
Two recent deals in New Zealand illustrate the delicate dynamics of the country's retail and wholesale markets, with Christchurch City Council (Christchurch)'s AA+ NZ$50 million (US$35.95 million) 2012 transaction placed with institutional buyers while the NZ$125 million 2014 from Auckland International Airport (Auckland Airport) (A-) attracted predominantly retail demand.
An elite group of nearly 40 major global investors from Asia, Europe and the Americas have received a bullish picture of the Australasian economy at a fixed income conference hosted by Commonwealth Bank of Australia (CommBank) and Queensland Treasury Corporation (QTC). Speakers at the event included the central banks and government funding agencies of Australia and New Zealand, as well as the four largest Australian semi-government treasury corporations.
The Australian Office of Financial Management (AOFM) hopes to use the second injection of up to A$8 billion (US$7.36 billion) of Commonwealth government money allocated to support the domestic residential mortgage-backed security (RMBS) market to complement the emerging recovery in third party demand for the asset class rather than being the sole bidder for securities.
Having launched the transaction with a target volume of A$100 million (US$92.33 million) the day before, Downer EDI (Downer) (BBB) priced its new October 2013 maturity bond on October 22 with an upsize to the maximum quantity of paper the issuer was prepared to print: A$150 million. Margin on the deal was in line with the indicative level, at 375 basis points over swap.