News
The Australian market, along with the rest of the world, has paused to take stock of the escalating COVID-19 outbreak. As of 3 March – and in the wake of a Reserve Bank of Australia (RBA) rate cut – credit market participants say it is too early to draw firm conclusions about the long-term effect but they have a degree of confidence that the Australian dollar market can stabilise.
On 4 March, Brisbane Airport Corporation (BBB/Baa2) revealed plans for a potential 7-10.5 year, Australian dollar denominated transaction. Commonwealth Bank of Australia, MUFG Securities and National Australia Bank have been mandated to arrange a series of investor meetings in Australia and Asia beginning on 6 March.
On 4 March, Commonwealth Bank of Australia began taking indications of interest for its self-led Class A1 Medallion 2015-1 residential mortgage-backed securities (RMBS) refinancing. Total indicative volume for the deal is A$553 million (US$364.3 million), with pricing expected on 6 March.
Columbus Capital proceeded with the pricing of its latest residential mortgage-backed securities (RMBS) deal on 28 February, just as the COVID-19 outbreak worsened. Deal sources say the timing was actually fortuitous for the issuer.
Demand for syndicated primary issuance of semi-government paper continued through at least the last week of February, driven by relative value in the sector, a lack of other high-grade supply and, most recently, investor flight to quality.
On 2 March, expected ratings were assigned by S&P Global Ratings and Moody's Investors Service to AMP Bank's potential residential mortgage-backed securities (RMBS) deal, Progress 2020-1 Trust. The deal has indicative total volume of A$750 million (US$489.2 million). Commonwealth Bank of Australia, Deutsche Bank, Macquarie Bank, MUFG Securities, National Australia Bank and Standard Chartered were mandated for the deal on 20 February.
Deal activity in the final full week of February was subdued after strong transaction flow in recent weeks. Queensland Treasury Corporation and New South Wales Treasury Corporation executed syndicated transactions to maintain robust semi-government issuance for the start of 2020, while Columbus Capital printed a A$1 billion (US$655.2 million) residential mortgage-backed securities transaction.
On 28 February, Transpower New Zealand (AA-/Aa3) revealed plans to increase its March 2025 bond, offered to institutional and New Zealand retail investors. Full details of the offer are expected to be released mid-March, according to Westpac Banking Corporation New Zealand Branch.
On 28 February, Avanti Finance decided not to proceed with its scheduled transaction and will revisit when market conditions stabilise, according to National Australia Bank.
On 27 February, Pepper Group revealed plans for an Australian dollar nonconforming residential mortgage-backed securities (RMBS) transaction. Commonwealth Bank of Australia, National Australia Bank and Westpac Institutional Bank have been mandated for investor meetings in Sydney on 4 March and Melbourne on 5 and 6 March.
