News
The Australian dollar credit market has been reshaped in the wake of COVID-19, largely as a consequence of Reserve Bank of Australia market intervention. A supply-demand imbalance is evident and could potentially bring risk, but fund managers express a degree of comfort on the basis that their approach to allocation has not yet needed to change dramatically.
Mercury NZ’s green-bond print on 19 March highlights significant ongoing demand for corporate debt in New Zealand amid a relatively quiet supply backdrop. Deal sources say pricing also illustrates the relative-value proposition of corporate bonds compared with bank debt.
On 24 March, Northern Territory Treasury Corporation (NTTC) (Aa3) mandated ANZ, National Australia Bank and UBS as lead managers for a new Australian dollar denominated, May 2032, benchmark transaction via syndication.
Lendlease Group (Baa3/BBB-), via its financing subsidiary Lendlease Finance, began taking indications of interest for its new Australian dollar denominated, 10-year, benchmark, green-bond transaction on 24 March. Initial price guidance for the deal is 220-225 basis points area over semi-quarterly swap.
On 24 March, NRW.BANK (AA/Aa1/AAA) launched a new A$250 million (US$190.7 million) minimum, five-year, Kangaroo, social-bond transaction. Indicative price guidance for the deal is 34 basis points area over semi-quarterly swap, equivalent to 42.25 basis points area over Australian Commonwealth government bond. Deutsche Bank, Nomura and RBC Capital Markets are leading.
KangaNews hosted its annual roundtable discussion for Australia’s leading bank fixed-income strategists in February – just as a new round of market speculation on the path of Reserve Bank of Australia stimulus was kicking off. The strategists remain convinced that Australian QE is set for some time, however – and that the market will continue to revolve around the gravitational pull of the central bank.
Humm group has executed its first securitisation transaction since rebranding from flexigroup late last year. The deal, which priced on 17 March, uses the issuer’s flexicommercial programme for the first time in the public market after a six-year hiatus.
Transaction data from the KangaNews deal database highlight a year of many firsts in the Australasian debt market. From skyrocketing sovereign and semi-government issuance to major banks’ absence from the senior-unsecured space and a strong rebound for corporate issuance – 2020 was a year like no other.
