News
Western Australia (WA) has joined Victoria in saying it will not initially take up the government guarantee on the existing state debt issued by the Western Australia Treasury Corporation (WATC) (AAA/Aaa), although it has left open the possibility of opting into the guarantee at some point in future if necessary.
Bank of New Zealand (BNZ) (AA/Aa2) more than doubled the size of the only outstanding bond to be covered by the New Zealand government's wholesale guarantee on July 3, adding NZ$415 million (US$261.41 million) to the outstanding NZ$285 million in its February 2014 line.
On July 2, Rentenbank (AAA/Aaa/AAA) became the eighth supranational, sovereign and agency (SSA) issuer to return to the Kangaroo market in 2009 with the pricing of its A$450 million (US$361.49 million) new 2014 line. The deal came to market at a margin of 108.5 basis points over the benchmark 6.5 per cent June 2014 Australian government bond.
Issuers outside the local big four banks continue to take advantage of the Australian government guarantee, with ABN AMRO Australian Branch (ABN) (A+/Aa2/AA-) and Bank of Queensland (BOQ) (BBB+/A2/BBB) bringing deals on July 1 and ING Bank Australia (ING) (AA-) following hot on their heels with another transaction a day later.
In the wake of a June 30, A$825 million (US$668 million) increase to its 2023 line, New South Wales Treasury Corporation (TCorp) (AAA/Aaa/AAA) has added its voice to the weight of opinion asking for more development of the long end of the Australian debt market curve.
Domestic vanilla issuance by Australian borrowers reached record volumes in the first half of 2009. By June 30 Australian non-government issuers had raised a total of just over A$40 billion (US$32.44 billion) in the year to date – almost reaching 2008's total figure of A$42.2 billion.
On June 26 Rabobank Nederland Australia Branch (Rabobank) (AAA/Aaa) priced a two-tranche July 2014 bond totalling A$650 million (US$533 million). The A$300 million floating rate notes (FRNs) and A$350 million fixed rate bonds priced at 130 basis points over the bank bill swap rate (BBSW) and swap. According to Mark Goddard, head of syndicate at joint lead manager Westpac Institutional Bank in Sydney, there were 50 investors in the book.
On June 24 Suncorp-Metway (Suncorp) (A/A1/A+) priced its debut Samurai bond deal - a single tranche two-year floating rate note totalling ¥13 billion (US$135.5 million) - at 30 basis points over three-month yen-Libor. The government-guaranteed transaction, which matures on June 30 2011, was led by joint bookrunners Nomura Securities (Nomura) and Nikko Citigroup.
The Department of Treasury appears to be beefing up its credit skills in such a way that some market participants are wondering if more credit-related policy and/or investment is on the way.
Suncorp-Metway (Suncorp) (A/A1/A+) is providing a bid for some of its own bonds, announcing a buyback of up to A$500 million (US$394 million) equivalent of subordinated bonds on June 16. The transaction, which is expected to close on July 3, will be managed by Citi.
On June 23 Treasury Corporation of Victoria (TCV) (AAA/Aaa) announced it does not need to use the commonwealth government guarantee to help assist in its funding task, arguing it is not in the semi-government authority's commercial interest to take up the offer at this point.
The treasurer of New South Wales (NSW) confirmed on June 23 that NSW Treasury Corporation (TCorp) (AAA/Aaa/AAA) intends to apply the newly-enacted commonwealth government guarantee on existing state bonds to all its outstanding lines with maturities from three to 15 years.