News
New Zealand’s government-bond rally and demand from local investors spurred International Finance Corporation (IFC) return to Kauri issuance. The deal is the supranational’s first benchmark New Zealand dollar deal in 2020 and features the market’s lowest-ever coupon.
Aurizon Network returned to the Australian dollar bond market to term out bank debt taken on during the COVID-19 crisis. The issuer tells KangaNews discussions of the pandemic’s impact were more prominent than environmental, social and governance (ESG) questions in the deal process, while the issuer maintained support from the domestic and regional investor base.
On 31 August, Asian Development Bank (ADB) (AAA/Aaa/AAA) launched a new NZ$150 million (US$101.1 million) minimum, five-year, Kauri transaction. Indicative price guidance for the deal is 29 basis points area over mid-swap, equivalent to 35.1 basis points area over New Zealand government bond. Pricing is expected on the day after launch, according to lead managers ANZ and TD Securities.
Qantas Airways (Baa2) launched a new 10-year, Australian dollar denominated, benchmark transaction on 31 August. The forthcoming deal is being marketed at 450 basis points area over semi-quarterly swap and is expected to price on the day after launch. Citi, Commonwealth Bank of Australia, National Australia Bank and Westpac Institutional Bank are leading.
A flurry of corporate deals have reopened the New Zealand market with high levels of demand, seemingly undeterred by the latest lockdowns. Deal sources say demand has always been present, especially in the retail space, but it is only now that issuers have been willing to test the waters for new issuance.
On 31 August, Mortgage House mandated National Australia Bank and Westpac Institutional Bank to engage investors regarding a potential Australian dollar denominated residential mortgage-backed securities (RMBS) transaction.
On 31 August, Summerset Group Holdings revealed plans for a NZ$100-150 million (US$67.4-101 million), seven-year domestic deal to be offered to institutional and retail investors. Full details of the transaction are expected in the week beginning 7 September. ANZ is arranger, and joint lead manager alongside Craigs Investment Partners, Forsyth Barr and Jarden Securities.
Treasury Corporation of Victoria (TCV) (AAA/Aaa) launched a new domestic, 11-year, syndicated, benchmark transaction on 31 August. Indicative price guidance for the forthcoming deal is 53-56 basis points area over 10-year futures contract, equivalent to 44.5-47.5 basis points area over Australian Commonwealth government bond. Pricing is expected on the day after launch, according to joint lead managers ANZ, Commonwealth Bank of Australia, National Australia Bank and UBS.
On 31 August, Commonwealth Bank of Australia (CommBank) (AA-/Aa3/A+) began taking indications of interest for a new self-led Australian dollar denominated, 10-year non-call five-year (10NC5), subordinated transaction, offered in either or both fixed and floating-rate note formats. The potential deal is being marketed at 195 basis points area over swap benchmarks. The notes are expected to be rated BBB+/Baa1/A-.
On 31 August, Resimac launched its residential mortgage-backed securities (RMBS) deal, Resimac Versailles Trust Series 2020-1. Indicative total volume for the transaction is NZ$250 million (US$168.4 million) and is expected to price 3 September. BNZ and Westpac New Zealand are joint arrangers and lead managers.
On 31 August, Mercury (BBB+ by S&P) launched a NZ$150-200 million (US$101-134.7 million), seven-year, green-bond transaction, offered to institutional and New Zealand retail investors. The forthcoming deal is being marketed at 125-145 basis points area over mid-swap and is expected to price on 4 September.
A busy final week in August included the Australian Office of Financial Management printing a record syndicated transaction of A$21 billion (US$15.3 billion). New Zealand Debt Management was also active, as were corporate borrowers on both sides of the Tasman Sea.