News

After a very positive start to the new year in Australia, supranational, sovereign and agency Kangaroo issuance has dialled right back as the sector goes through a periodic revaluation of relative value and appeal to domestic and offshore investors. Assisted by their affinity with sustainability-labelled issuance, however, these issuers remain a core part of the market in Australia and New Zealand.

KangaNews surveyed supranational, sovereign and agency issuers in May-June 2022, marking the ninth year in which these entities have provided their views and outlook on global funding. The latest survey shows a resurgence in use of noncore markets – most notably the Australian dollar – and the ever-growing significance of sustainability labelled bonds.

The global rates market is at an inflection point. Prashant Newnaha, director, Australian and New Zealand rates and macro strategy at TD Securities in Singapore, discusses how the rapid change in conditions is affecting Australasian markets in particular.

New South Wales Treasury Corporation targeted bank balance sheet investors with its latest floating-rate offering, noting the format was the ideal option for issuing into a more volatile market. The issuer says it wants to add new lines in future but will also focus on adding liquidity to existing ones.

Ampol’s latest hybrid deal features an innovative structure that integrates sustainability-linked features while keeping 50 per cent equity credit – a feat the lead manager says a rated issuer has not previously achieved. Issuer and lead say strict alignment with the Sustainability-Linked Bond Principles was not a priority as this is a bespoke transaction sold to just a few investors.