News
The Australian Office of Financial Management (AOFM) released its final investment principles for the Australian Business Securitisation Fund (ABSF) on 22 July. In speeches in Sydney and Melbourne, the AOFM suggested that ABSF investment will start cautiously in areas close to the existing market before moving in time to the most poorly served aspects of SME lending.
Westpac New Zealand (Westpac NZ) priced the local market’s largest-ever senior financial institution (FI) deal on 24 July. The issuer tells KangaNews undersupply in the market created the volume opportunity despite deposit rates remaining elevated.
Conducive funding conditions spurred a return to long-dated local corporate issuance for AusNet Services (AusNet), which printed a 10-year deal on 24 July. The emergence of consistent opportunities for 10-year issuance spurred the Australian corporate market to its best-ever year in 2017, and some market participants believe investors’ hunt for yield may be reopening the window.
Kommunalbanken Norway (KBN) (AAA/Aaa) launched an increase to its November 2029 Kangaroo on 26 July. The forthcoming transaction has indicative price guidance of 52 basis points area over semi-quarterly swap, equivalent to 65.5 basis points area over Australian Commonwealth government bond. Pricing is expected on the day of launch, according to joint lead managers Deutsche Bank and Mizuho Securities.
On 26 July, Toronto-Dominion Bank (TD Bank) (AA-/Aa1) launched a new one-year, Australian dollar denominated benchmark Kangaroo floating-rate note (FRN) deal. The forthcoming transaction, which is expected to price on the day of launch, is being marketed at 28 basis points over three-month bank bills. TD Securities is leading.
Late in the Sydney day on 25 July, EUROFIMA (AA+/Aa2) launched a minimum A$40 million (US$27.8 million) increase to its May 2029 Kangaroo bond. Indcative price guidance for the forthcoming transaction is 62 basis points area over semi-quarterly swap, equivalent to 69.5 basis points area over Australian Commonwealth government bond. Pricing is expected on 26 July, according to joint lead managers Daiwa Capital Markets and Nomura.
Australian bond issuance was healthy overall in the first half of 2019 but continued to struggle to produce credit diversity, according to KangaNews’s transaction data. Elsewhere, the securitisation market delivered volume and breadth while high-grade Kangaroo issuance swung back to the mid-curve.
