News
The nonbank lending sector represents a significant portion of the Australian securitisation market. While the volume and frequency of deals indicates an increasing level of investor comfort with the sector, myths pertaining to nonbanks’ lending practices persist and could inhibit future funding growth.
New Zealand’s securitisation market has traditionally been underdeveloped, with limited issuance giving little incentive for institutional investors to devote analyst resources to the asset class. Nonbanks are benefiting from market growth, however – and regulatory change could be the catalyst for a further leap forward.
Issuance in the Australian securitisation market has historically been dominated by residential mortgage-backed securities (RMBS) – a trend which shows little sign of changing. At the same time, though, there appears to be growing supply of, and demand for, a wider range of securitisation collateral.
On 26 September, Auckland International Airport (Auckland Airport) (A- by S&P) mandated ANZ to arrange an investor call on 1 October regarding a potential three-year, New Zealand dollar denominated floating-rate note (FRN) deal.
On 25 September, Downer Group Finance (Downer) (BBB by Fitch) launched an increase to its April 2026 domestic bond. The deal is being marketed at 170 basis points area over semi-quarterly swap and is expected to price on the day after launch. Westpac Institutional Bank is leading.
Western Australian Treasury Corporation (WATC) (AA+/Aa1) launched a new October 2034, Australian dollar denominated transaction on 25 September. Indicative price guidance for the forthcoming deal, which is expected to price on the day after launch, is 94-98 basis points area over the 10-year futures contract, equivalent to 71-75 basis points area over Australian Commonwealth government bond. ANZ is leading.
On 25 September, Liberty Financial (Liberty) mandated Bank of America Merrill Lynch, Credit Suisse and Westpac Institutional Bank to engage investors regarding a potential Australian dollar denominated transaction from its small-ticket commercial loans SME programme.
The Australian Securitisation Forum (ASF) is consulting with market participants on interest-rate benchmark reform as it relates to securitisation. The consultation comes amid accelerating global moves to adopt alternative reference rates and fallback language, and ongoing questions about the resilience of the Australian securitisation market’s most commonly used benchmark.
In September 2019, KangaNews convened its annual roundtable discussion between the heads of funding at Australia’s most prominent nonbank lenders – cohosted, for the first time, by Natixis. The fundamental story continues to be one of asset growth and therefore a need to keep building access to global funding options.
Key data and information on 13 nonbank lenders active in Australia and New Zealand, including programme information, funding strategy, debt data and issuer insights.