News
The pattern of Australian dollar issuance by financial institutions (FIs) since the middle of the current decade indicates a number of relatively reliable execution windows. The timing of Australian dollar FI issuance is weighted toward the beginning and middle of each quarter while the second half of the year sees a notable drop-off in volume.
On 10 December, TR Group (Baa3), a heavy vehicle rental and lease company, revealed plans to engage wholesale debt investors for a possible five-year New Zealand domestic transaction. Commonwealth Bank of Australia and Westpac Banking Corporation New Zealand have been mandated for the potential deal.
Primary deal flow in the first week of December was highlighted by asset-backed securities deals on either side of the Tasman Sea. In New Zealand, Latitude Financial Services priced its NZ$200 million (US$137.6 million) market debut while Liberty Financial priced a A$250 million (US$180.8 million) auto receivables-backed deal. Meanwhile, the 2018 KangaNews Awards winners were revealed.
The New Zealand securitisation market welcomed a new entrant on 6 December when Latitude Financial Services (Latitude) priced its inaugural New Zealand dollar asset-backed securities (ABS) deal. The deal’s domestic focus provided insulation from external market forces according to deal sources, who add that there is growing enthusiasm for securitised product among local buyers.
On 6 December, Qudos Mutual (BBB- by S&P) launched a new, indicative A$15 million (US$10.8 million) one-year floating-rate note (FRN) transaction, via Westpac Institutional Bank. The forthcoming deal is being marketed in the area of 85 basis points over three-month bank bills. Pricing is expected in the near future.
On 6 December, NWB Bank (AAA/Aaa) launched a minimum A$60 million (US$43.5 million) increase to its July 2028 Kangaroo bond. The forthcoming deal has indicative price guidance of 47 basis points area over semi-quarterly swap, equivalent to 50.75 basis points area over Australian Commonwealth government bond. Pricing is expected on the day of launch, according to lead manager RBC Capital Markets.
Commonwealth Bank of Australia (CommBank) has printed the first Australian-origin transaction to reference an alternative benchmark rate. The bank issued £125 million (US$158.8 million) of one-year notes on 3 December at 40 basis points over the sterling overnight index average (SONIA), via RBC Capital Markets (RBCCM). Deal sources say the UK market is the most progressed towards base-rate change, but add that there is much work still to be done ahead of the forthcoming expiry of interbank offered rates.
Having been acquired by Cerberus Capital (Cerberus) in March 2018, Bluestone Group (Bluestone)’s Sydney-based chief executive officer, Campbell Smyth, says the business has been able to expand significantly into the near-prime lending space. The company’s conservative lending practices have remained, he adds, leaving it well placed for sustained future growth.