News
It was another low week for deal volume in the Australian and New Zealand primary markets, the latter of which saw no activity. South Australian Government Financing Authority and Rentenbank issued increases to existing lines, the former in the form of Australia’s first fixed-rate semi-government syndication for several months, while RedZed printed a A$500 million (US$342.6 million) residential mortgage-backed securities deal.
RedZed took a pragmatic approach to achieve the volume target for its latest public residential mortgage-backed securities transaction. The issuer says willingness to compromise on initial price guidance allowed it to draw investors into the book and print at a level that worked for both sides, even in a securitisation market that is facing growing headwinds.
South Australian Government Financing Authority struck out on its own on 12 July, syndicating a tap to its May 2036 fixed-rate benchmark – defying recent semi-government issuance dynamics, which have seen limited syndicated supply and a floating-rate focus. The borrower says higher yield on the tap attracted a wide book of investors.
Covered bonds represented better value over senior-unsecured issuance for Westpac New Zealand’s 7 July euro deal. The issuer targeted investor demand for shorter tenor and fixed-rate product, a strategy that deal sources say was key to de-risking execution.
