News
The Australian sovereign and semi-government bond market faced game-changing challenges in 2020. Greatly increased issuance requirements seem baked in for the foreseeable future, but those most responsible for distributing and trading the bonds appear relatively confident that – despite resumed volatility in late February – the market is set up well for the pandemic end game.
At one stage in 2020 it seemed Australia’s government-sector borrowers might end up with funding requirements larger than the market’s ability to support them. By the time the sector’s biggest issuers came together at a KangaNews roundtable in early February 2021, however, tasks had mainly come under control and issuance was well ahead of the required run rate.
Australian market deal flow slowed in first week of March after a strong showing the week prior amid rates market volatility. Nonetheless, Resimac printed a large dual-currency residential mortgage-backed securities transaction and Aurizon Operations executed its debt capital markets debut.
On 4 March, Pepper Group revealed plans for a new, Australian dollar denominated, prime residential mortgage-backed securities (RMBS) deal. Commonwealth Bank of Australia, National Australia Bank, SMBC Nikko and Westpac Institutional Bank will engage investors.
On 4 March, Eclipx Group began taking indications of interest for its asset-backed securities (ABS) transaction, FP Turbo Series 2021-1. Capped volume for the deal is A$300 million (US$233.3 million), with the A$240 million class A tranche – 1.39-year weighted-average life – on offer at 70 basis points area over one-month bank bill swap rate.
On 3 March, NRW.Bank (AA/Aa1/AAA) mandated Deutsche Bank, Nomura and RBC Capital Markets to arrange investor calls on 4 March regarding a potential inaugural Kangaroo social-bond transaction.
On 3 March, Liberty Financial (BBB- by S&P) revealed plans for a potential four-year or longer, Australian dollar denominated, senior-unsecured, benchmark transaction. Deutsche Bank, National Australia Bank and Westpac Institutional Bank have been mandated to arrange a group investor call on 4 March.