News
ME Bank began taking indications of interest for its residential mortgage-backed securities (RMBS) transaction, SMHL 2018-2, on 25 July. The deal, which has indicative total volume of A$500 million (US$370.5 million), may launch as early as the week beginning 30 July.
On 24 July, S&P Global Ratings assigned preliminary ratings for five classes of ME Bank's residential mortgage-backed securities (RMBS) transaction, SMHL Series Securitisation Fund 2018-2 (SMHL 2018-2). Moody's Investors Service assigned its provisional rating to the Class A notes of the deal on 23 July. The transaction has indicative total volume of A$500 million (US$368.8 million).
Late in the Sydney day on 23 July, KfW Bankengruppe (KfW) (AAA/Aaa) launched a minimum A$100 million (US$73.8 million) increase to its March 2028 Kangaroo bond. Indicative price guidance for the forthcoming deal is 38 basis points area over semi-quarterly swap, equivalent to 45.5 basis points area over Australian Commonwealth government bond. Pricing is expected on 24 July, according to lead manager TD Securities.
Benchmark financial institution (FI) issuance returned to the Australian domestic market in July, with a total of A$3.9 billion (US$2.9 billion) printed across a trio of public three-year deals. With market volatility limiting FI issuance in preceding weeks, deal sources say a build up in investor cash as well as issuer willingness to execute at investors’ preferred tenor drove the transactions.
On 23 July, Pepper Group (Pepper) launched its nonconforming and prime residential mortgage-backed securities (RMBS) transaction, PRS 21. The deal has an indicative total volume of A$700 million (US$519.6 million) equivalent, including the US dollar denominated Class A1-u notes. Pricing is expected on or before 27 July.
Toronto Dominion Bank (TD Bank) (AA-/Aa1) launched a minimum A$100 million (US$74.2 million) one-year Kangaroo floating-rate note (FRN) transaction on 23 July. Indicative price guidance for the forthcoming deal is 46 basis points area over three-month bank bills. Pricing is expected on the day of launch, according to lead manager TD Securities.
On 23 July, CNH Industrial Capital Australia (CNH Capital) revealed plans to meet investors regarding a possible asset-backed securities (ABS) transaction. ANZ has been mandated as arranger for the potential deal, as well as joint lead manager alongside RBC Capital Markets. Investor meetings and calls will take place in the week beginning 30 July.
More than A$6 billion (US$4.4 billion) of new primary issuance priced in the Australian market during the third week of July. Headlined by the Australian Office of Financial Management's A$3.6 billion 2041 syndication, deals also included a A$250 million 20-year transaction for Zurich Finance Australia as well as a A$600 million 3.5-year floating-rate deal for United Overseas Bank Sydney Branch.
Ongoing demand for long-dated Australian dollar product, predominantly from specific cohort of investors in Asia, helped Zurich Finance Australia (Zurich) to execute a rare 20-year benchmark financial-institution (FI) senior deal in July. Demand is niche, but market sources insist the outcome is an important step in the continued evolution of the Australian market.
On 19 July, ME Bank mandated ANZ, Commonwealth Bank of Australia, Macquarie Bank and National Australia Bank for an Australian dollar denominated, prime residential mortgage-backed securities (RMBS) transaction from its SMHL programme. Investor meetings will occur in Sydney and Melbourne in the week beginning 23 July.