News
The final form of Australia’s total loss-absorbing capacity (TLAC) regime is as yet unknown. One thing that is beyond doubt, however, is that the domestic investor base will play a meaningful role in funding whatever requirement the banks end up with. The KangaNews Debt Capital Markets Summit 2019 concluded with four key local players sharing views on the prospects.
Inter-American Development Bank (IADB) (AAA/Aaa/AAA) launched a minimum A$25 million (US$17.8 million) increase to its June 2029 Kangaroo bond, on 23 April. The forthcoming transaction has indicative price guidance of 42 basis points area over semi-quarterly swap, equivalent to 54.85 basis points area over Australian Commonwealth government bond. Pricing is expected on the day of launch, according to sole lead manager TD Securities.
On 23 April, NWB Bank (AAA/Aaa) launched an indicative A$15 million (US$10.7 million) increase to its May 2029 Kangaroo bond with price guidance of 53.5 basis points area over semi-quarterly swap. The deal is expected to price on the day of launch, according to sole lead manager Daiwa Capital Markets.
The Australian Prudential Regulation Authority (APRA) has hinted that its plan for the forthcoming Australian loss-absorbing capacity (ALAC) regime to be funded predominantly via tier-two instruments may not be set in stone. It remains unclear what shape the final regime will take, but more options now appear to be on the table than first thought.
Australian elections, markets and politics in Europe, bank funding, the evolution of the domestic corporate market and the future of deal execution were all on the agenda at the KangaNews Debt Capital Markets Summit 2019. Industry leaders shared their insights into all the key issues of the day.
The third week of April was relatively quiet for new issuance in the lead up to the Easter long weekend. On the Australian domestic front, Downer Group Finance printed a seven-year, A$300 million (US$215.5 million) deal and Bank of Queensland issued a three-year, A$500 million floating-rate note. Resimac priced a NZ$250 million (US$168 million) residential mortgage-backed securities (RMBS) deal in New Zealand.
In the wake of its latest New Zealand residential mortgage-backed securities (RMBS) deal, Resimac says structural changes in the local mortgage market are opening opportunities for nonbanks in prime mortgage lending and, therefore, securitisation. The issuer also says the depth and breadth of bids for its paper broadened in the new transaction.
The future of interbank offered rates (IBORs) is under question globally. While Australia’s rate appears to stand a better chance of survival than many of its global peers, local market participants cannot afford to be complacent in a rapidly evolving environment. IBOR transition was explored in depth at the KangaNews Debt Capital Markets Summit 2019, including in a panel discussion featuring leading local and international experts.
Approaching the end of the first quarter of 2019, most Australian economists had shelved expectations of higher rates and in many cases replaced them with predictions of further cuts in the coming months. The KangaNews Debt Capital Markets Summit 2019 brought together a panel of the country’s top economic commentators to delve into the issues at play.