News
On 10 September, Shinhan Bank (A+/Aa3/A) mandated J.P. Morgan, Mizuho Securities and National Australia Bank to arrange a series of investor calls beginning 15 September regarding a potential 3-5 years, Kangaroo, COVID-19 alleviation social-bond.
Liberty Financial priced its largest-ever SME asset-backed securities (ABS) deal on 3 September. The issuer says the collateral mix of its SME transactions has evolved towards a heavier weighting of self-managed super fund (SMSF) investor loans, diminishing some concerns around collateral.
There can’t be many people who would put 2020 down as a vintage year. In fact, I think most of us would probably have rather gone to sleep in late February and not woken up until Christmas. While we might not be enjoying much of what 2020 has thrown at us, unique circumstances have given the Australian debt market a chance to demonstrate a new level of maturity and resilience.
COVID-19 has dominated global market bandwidth in 2020, to the extent that many regulatory initiatives and other market-development projects have been put on pause. This cannot be said for the process of adapting to the demise of interbank offer rates (IBORs), for which the hard deadline of 31 December 2021 continues to loom.
Transaction data from KangaNews’s deal database highlight a strong second half of 2019 in the Australasian credit market. Meanwhile, syndicated semi-government supply notably increased, the green, social and sustainability bond space grew significantly and New Zealand domestic issuance achieved record 12-month volume.
While Australia is not facing the same compulsion as other global markets to drop its credit reference rate – in this case the bank-bill swap rate (BBSW) – there is still growing reason for market participants to understand, and start using, alternative reference rates (ARRs). Commonwealth Bank of Australia (CBA) took a leadership position in 2019 by pricing a securitisation deal linked to Australian overnight index average (AONIA). The bank convened a roundtable with KangaNews to discuss the next phase of evolution.
On 9 September, South Australian Government Financing Authority (SAFA) (AA+/Aa1) announced it will not proceed with its mandate for a one-year Australian overnight index average (AONIA)-linked, floating-rate note (FRN) transaction, citing the changing dynamics of short-end markets.
Qantas’s new 10-year deal was business-as-usual process, the issuer says, as it sought to refinance a 2021 maturity and maintain a diverse funding base. The COVID-19 pandemic was always going to be a big factor in the deal, but Qantas tells KangaNews its financial record and future prospects were sufficient catalyst for investor engagement.
On 9 September, Mortgage House began taking indications of interest for a residential mortgage-backed securities (RMBS) deal, Mortgage House RMBS Series 2020-1. The transaction has capped volume of A$400 million (US$288.8 million) and is expected to launch in the week beginning 14 September. Westpac Institutional Bank is arranger and joint lead manager alongside National Australia Bank.
On 9 September, Charter Hall Exchange Finance (A3), managed by the Charter Hall Group, mandated Commonwealth Bank of Australia to arrange a conference call on 11 September regarding a potential Australian dollar denominated transaction, offered in either or both 10- and 12-year tenors.
On 9 September, Kiwibank (A/A1/AA-) revealed plans for a debut, five-year, soft-bullet covered-bond Kangaroo deal. ANZ and UBS have been appointed joint lead managers and will arrange a fixed-income investor call on the day of the announcement. The transaction is expected to be rated Aaa/AAA.