News
Australian dollar primary market syndicated supply has been muted in the first two weeks of 2021. The two traditional sources of early-year supply are largely missing, and technical factors are largely set against high-grade supply. The bright spot, intermediaries say, is that secondary market dynamics are gradually swinging in support of primary issuance.
On 15 January, Australian Office of Financial Management (AOFM) gave an update on its 2020/21 issuance programme. Its total requirement of A$230 billion (US$178.7 billion) and amount issued to date of A$153.5 billion are unchanged from its last update on 18 December.
A new survey of sovereign borrowers that have issued green, social and sustainability (GSS) bonds suggests a strong rationale for joining the market. Issuers responding to the survey, which was published by Climate Bonds Initiative (CBI) on 15 January, say their GSS programmes were relatively quick to deliver, enhanced transparency, found new investors and – in many cases – cut the cost of borrowing.
On 14 January, Asian Development Bank (ADB) (AAA/Aaa/AAA) launched a new, 10-year Kangaroo deal with minimum volume of A$150 million (US$116.2 million). The forthcoming deal has indicative price guidance of 31 basis points area over semi-quarterly swap and 30.2 basis points area over Australian Commonwealth government bond. Pricing is expected on the day after launch according to lead managers J.P. Morgan, Nomura and RBC Capital Markets.
On 14 January, Mercedes-Benz Australia Pacific (BBB+/A3/BBB+) launched an Australian dollar denominated, three-year EMTN deal, via Commonwealth Bank of Australia and TD Securities. The transaction has indicative volume of A$100 million (US$77.5 million) and price guidance of 75 basis points area over semi-quarterly swap. Pricing is expected on the day of launch during London hours.
On 12 January, BNK Banking Corporation, a financial institution operating in banking and mortgage broking aggregation, launched a maximum A$10 million (US$7.7 million) 10-year non-call five-year (10NC5), tier-two capital deal. The transaction is being marketed at 500-550 basis points over three-month bank bills, with the final margin and interest rate to be determined on 18 January following a bookbuild. Bell Potter Securities is leading.
