News
In June, for the first time, KangaNews and Natixis CIB brought together the treasurers from the big-four New Zealand banks to discuss economic conditions, a funding outlook that has seen the banks take a step back from capital markets, and a global demand environment that would welcome new supply from New Zealand.
Consistent cadence of new issuance has kept Australian dollar securitisation volume comfortably ahead of record pace so far in 2024. In recent months, issuance diversity – in the form of transaction collateral and renewed activity from bank borrowers – has further demonstrated the health of the asset class.
The Australian fixed income and securitisation markets largely built on a highly successful 2023 to deliver positive new issuance volume in the first six months of 2024, setting a number of records albeit typically with incremental rather than game-changing growth. New Zealand, meanwhile, has had a slow first half for new issuance outside the local sovereign.
Thinking in global markets is turning hard to the nature of the looming inflection point for monetary policy. Central banks may not cut, or at least not far, unless the pain being felt in global economies metastasises into unemployment and other symptoms of spare capacity. Despite this uncertainty – and many others – issuers were able to make hay in H1, including in an Australian market that has experienced unprecedented scale and consistency of demand. Participants at the annual ANZ-KangaNews global funding roundtable, which took place in London in June, surveyed the landscape.
Investor diversity, relative value and the growing status of the Australian dollar market lined up for a quartet of Canadian provinces as they shattered the record volume for the sector in Kangaroo format. The nearly A$5 billion issued in the span of a few weeks represents a sea change for provincial activity – but might be hard to repeat.
Market participants speaking at the second-ever New Zealand Securitisation Forum reflected on the gains the market has made in the last decade. While collateral diversity has increased, issuance volume and frequency lags as regulatory uncertainty and the economic climate continue to create headwinds.
Transition and sustainability-linked bonds have offered early potential to support the aspects of economic transition with the greatest degree of additionality and impact. But issuance has slowed after a promising start, in particular due to enhanced scrutiny of transaction structures’ ambition. Market leaders gathered in Amsterdam in June to path a road forward.
