News
On 5 August, Korea Expressway Corporation (AA/Aa2) mandated HSBC, Mizuho Securities and Standard Chartered as lead managers to arrange a series of global investor calls beginning 12 August regarding a potential, 3-5 year, Australian dollar denominated Kangaroo transaction.
BNP Paribas’s debut as a Kangaroo green-bond issuer also introduced a globally innovative structure to the local environmental, social and governance (ESG) market. The transaction, which priced on 3 August, is a standard use-of-proceeds green bond that also rewards investors for the outperformance of a new forward-looking climate-transition equity index.
The Reserve Bank of Australia (RBA) revealed in its monetary policy decision statement that it will buy Australian government securities (AGS) in the secondary market on 5 August – its first intervention since 6 May. The decision comes as the three-year Australian Commonwealth government bond (ACGB) yield has consistently been above the RBA’s 0.25 per cent yield target since early July.
On 4 August, South Australian Government Financing Authority (SAFA) (AA+/Aa1) launched a syndicated increase to its May 2032 line. The forthcoming deal is being marketed at 80-82 basis points area over 10-year futures contract, equivalent to 70.4-72.4 basis points area over Australian Commonwealth government bond.
Following the pricing of its longest-dated syndicated deal, on 30 July, New Zealand Local Government Funding Agency (LGFA) says the deal harnessed momentum generated in the long end by recent syndications from the Australian and New Zealand sovereign borrowers.
On 3 August, Wellington International Airport launched a NZ$75-100 million (US$49.7-66.3 million) six-year deal to be offered to institutional and New Zealand retail investors. The forthcoming deal is being marketed at 220-245 basis points area over mid-swap and is expected to price on 7 August. ANZ and Forsyth Barr are leading.
The last week of July was highlighted by high-grade issuance in Australasian markets, with transactions from the Australian Office of Financial Management and New Zealand Local Government Funding Agency. Meanwhile, Ausgrid Finance returned to the Australian dollar market for only its second domestic deal.
Ausgrid Finance returned to the Australian dollar market for only its second domestic transaction, on 29 July. The issuer says it saw a window of opportunity to refinance debt ahead of schedule and moved quickly to take advantage of conducive issuance conditions.
Pricing in the Australian dollar supranational, sovereign and agency (SSA) market remains dislocated, intermediaries say, based on lack of alignment between domestic investor and offshore borrower pricing expectations. A number of factors are at play, not least among them the record support SSA borrowers are receiving in global markets.
On 31 July, South Australian Government Financing Authority (SAFA) (AA+/Aa1) revealed plans for a potential A$1 billion (US$719.5 million) syndicated tap of its May 2032 line in the week beginning 3 August. J.P. Morgan, National Australia Bank, RBC Capital Markets and Westpac Institutional Bank are leading.
On 31 July, Resimac mandated BNZ and Westpac New Zealand to sound investors for a potential New Zealand dollar residential mortgage-backed securities (RMBS) deal from its Versailles programme.