News
Support from debt investors is a critical component of Australian nonbank lenders’ business models, and the major nonbanks have investor relations high on their priority lists. These issuers have been able to fund their businesses through the credit cycle, and domestic fund managers say they see the appeal of the nonbank value proposition – with appropriately detailed credit work.
On 23 October, Pepper Australia (Pepper) opened the books on the Class A1-S, Class A2 and Class B notes of its new residential mortgage-backed securities (RMBS) issue, Pepper Residential Securities Trust No.19 (PRS19). The total deal is for an equivalent of A$600 million (US$470 million), according to arranger National Australia Bank and additional lead managers Commonwealth Bank of Australia and Westpac Institutional Bank.
On 23 October, Commonwealth Bank of Australia (CommBank) revealed plans to engage with investors on a capital-relief and funding residential mortgage-backed securities (RMBS) transaction under its Medallion programme. An Australian dollar RMBS is expected to launch and price in November, according to lead manager CommBank.
On 23 October, Deutsche Bahn Finance, guaranteed by Deutsche Bahn (AA-/Aa1), revealed that it has mandated a new, 15-year Kangaroo transaction. The forthcoming deal will launch in the near future, according to joint lead managers Daiwa Capital Markets and HSBC.
Key statistics, issuer information and market data on key nonbank borrowers.
On 23 October, Ausgrid Finance (Ausgrid) (Baa1) launched a new, seven-year Australian dollar-denominated senior-secured bond. The forthcoming transaction, Ausgrid’s domestic debut, will be in either or both of fixed- and floating-rate format and has price guidance of 130 basis points area over swap benchmarks. Joint lead managers are Mizuho Securities, National Australia Bank and Westpac Institutional Bank.
Northern Territory Treasury Corporation (NTTC) (Aa2) launched a new, April 2028 domestic benchmark bond on 23 October. The forthcoming deal has initial price guidance of 70-74 basis points over the 10-year futures contract, equivalent to 68.75-72.75 basis points over Australian Commonwealth government bond.
A detailed list of securitisation transactions issued by nonbanks profiled in the KangaNews Nonbank Yearbook 2017.
More than A$3.5 billion (US$2.7 billion) of new primary issuance priced during the third week of October, which included the Australian Office of Financial Management adding A$2.1 billion to its March 2047 syndicated benchmark bond and New South Wales Treasury Corporation printing a new 2029 domestic line. Meanwhile, Kiwibank mandated a potential 10-year Kangaroo bond.
Having been absent for two-and-a-half years, a brace of United Arab Emirates (UAE)-origin issuers returned to the Kangaroo market in recent weeks. Deal sources suggest the return of price stability to the oil market in recent has proved to be a catalyst for a reopened Kangaroo market.