News

Supportive local conditions convinced Westpac New Zealand to return to its domestic market for its latest tier-two transaction rather than – as it suggested would most likely be the case following its previous subordinated debt deal – going offshore. The issuer says the limited supply of five-year senior bank paper this year helped ensure institutional investors were receptive to a tier-two deal.

A step-change in supply dynamics has combined with positive demand factors to boost secondary turnover in Australian semi-government bonds. Local real-money investors generally agree with the suggestion that semi-government tradability has reached a new level, while bid-side liquidity is strong even for less heavily traded names.

Local investors say liquidity in New Zealand’s high-grade bond sector is imperfect, but generally around the mid-point of historical ranges for spreads and turnover. The uncertain regulatory environment is a near-term hurdle.

The annual roundtable for Australia’s leading government-sector borrowers, hosted by KangaNews and Westpac Institutional Bank in July, found the issuers in buoyant mood. They have been able to shake off market volatility and economic uncertainty to deliver positive funding outcomes – while the semi-government sector in particular may have hit a new level of liquidity and global relevance.