News
On 7 July, DBS Group Holdings (Aa2/AA-) began taking indications of interest for a new three-year, Kangaroo, senior-unsecured transaction, offered in either or both fixed and floating-rate note format. The potential deal is being marketed at 75 basis points area over swap benchmarks.
On 6 July, Resimac added Commonwealth Bank of Australia, Deutsche Bank and Wells Fargo Securities to its joint lead manager panel for its potential non-conforming residential mortgage-backed securities (RMBS) deal from its Bastille programme.
On 6 July, Seek (NR) launched a minimum A$100 million (US$69.5 million) increase to its June 2026 subordinated notes. Indicative price guidance for the deal, which is expected to price on the day after launch, is 550 basis points area over three-month bank bills. HSBC, MUFG Securities and Westpac Institutional Bank are leading.
On 6 July, Societe Generale Sydney Branch (SocGen Sydney) (A/A1/A-) mandated ANZ, Mizuho Securities, SocGen and Westpac Institutional Bank to arrange an investor call, to occur on the same day, regarding a potential new three-year, Australian dollar denominated, senior-preferred, floating-rate note benchmark transaction.
The Australian dollar corporate debt market finished the first half of 2020 with a flurry of deals and greatly improved sentiment. Corporate originators do not expect the floodgates of issuance to open in the second half but say conditions should be supportive for active issuers.
The week bridging 2020 and 2021 financial years was highlighted in Australian markets by securitisation transactions from Bluestone Group and Metro Finance. Meanwhile, Australian Office of Financial Management gave guidance on its 2020/21 financial year borrowing.
Increased issuance from the AOFM – including targeting maturities of 3-5 and 10-12 years – and the Reserve Bank of Australia (RBA)’s intervention in the Australian sovereign bond market have accelerated Australian Securities Exchange (ASX) thinking about a new contract in its bond futures suite. The exchange is planning to introduce a new five-year contract by the end of the year.
On 3 July, the Australian Office of Financial Management (AOFM) gave issuance guidance for the 2020/21 financial year, which will apply until the Federal government budget is handed down in October 2020. There is no formal overall volume stipulated, but the AOFM expects to continue to tender Treasury bonds at a rate of A$4-5 billion (US$2.8-3.5 billion) most weeks.
The following interview is with an Australian-based executive at a nonbank financial institution. It was conducted on 1 July 2020.
On 2 July, Firstmac began taking indications of interest for its residential mortgage-backed securities (RMBS) deal, Firstmac 2-2020. Total volume for the deal is A$500 million (US$347.7 million), with the potential to upsize, and is expected to launch in the week beginning 6 July. National Australia Bank is arranger and joint lead manger alongside ANZ, J.P. Morgan, Standard Chartered and Westpac Institutional Bank.