News
Australian fund managers, strategists and traders remain sceptical of the apparent rationale behind a bond sell-off that has seen local long-end yield spike after creeping higher in previous months. The price move appears to reflect greater inflation expectations and an interest rate hike before the Reserve Bank Australia’s forecast of 2024, but there is some evidence that it is not being backed by substantial repositioning activity.
On 25 February, New South Wales Treasury Corporation (TCorp) revised down its total funding task for financial year 2020/21 by A$6.25 billion (US$5 billion) to A$29.55 billion, following the release of the New South Wales (NSW) state government’s half-yearly review.
On 25 February, Newcastle Permanent Building Society (NPBS) (BBB/A3) launched a new five-year, Australian dollar denominated, senior-unsecured, floating-rate note, benchmark transaction. Indicative price guidance for the deal is 65 basis points area over three-month bank bills and is expected to price on the day of launch.
In its debut issuance, Charter Hall LWR printed the tightest spreads for seven- and 10-year tenors by a triple-B rated corporate since at least the financial crisis. Lead managers say conditions remain well set for corporate borrowers planning to issue debt in Australia.
Resimac announced plans for a dual-currency residential mortgage-backed securities (RMBS) deal, Premier Series 2021-1, on 24 February. Citi, National Australia Bank and MUFG Securities are lead managers on both the Australian dollar and US dollar denominated tranches, while Deutsche Bank joins as lead manager on the former.
New Zealand became the only sovereign rated by S&P Global Ratings to be upgraded since the beginning of the COVID-19 crisis, on 22 February. The one-notch upgrade – to AAA – was driven by the country’s effective response to the pandemic and also improves the rating of related government agencies and local councils.