News
The issuers of two new residential mortgage-backed securities (RMBS) deals highlight engagement by investors – including offshore accounts – all the way down the capital structure as instrumental to volume outcomes. The distribution profile of both transactions demonstrates the extent to which the net is being cast wider.
Issuer and investors say pricing on Deutsche Bahn’s debut Kangaroo deal worked for both sides. However, final book size may have been somewhat tempered by the fact that Deutsche Bahn falls into a mandate gap for some of Australia’s largest institutional accounts.
International Finance Corporation (IFC) (AAA/Aaa) launched a minimum A$200 million (US$159.4 million) increase to its August 2022 Kangaroo bond on 25 September. The forthcoming deal is being marketed at 29 basis points area over semi-quarterly swap, and is expected to price on or before 26 September.
Oversea-Chinese Banking Corporation Sydney Branch (OCBC Sydney) (AA-/Aa1/AA-) launched a new, three-year domestic benchmark bond on 25 September. The forthcoming deal, which is expected to emerge in either or both of fixed- and floating-rate formats, has price guidance of 62 basis points area over swap benchmarks.
Australian dollar volume surpassed the A$2.7 billion (US$2.1 billion) mark during the third week of September. Suncorp-Metway (Suncorp) priced its largest residential mortgage-backed securities transaction since 2008, with the final A$1.5 billion print double the deal's launch volume. Meanwhile, Deutsche Bahn completed its debut Australian dollar deal, which is also the first-ever Kangaroo transaction from a German true-corporate issuer, according to KangaNews data.
Pepper Group (Pepper) disclosed on 21 September that it plans to discuss a potential nonconforming residential mortgage-backed securities (RMBS) transaction with investors in a series of meetings. The meetings are being arranged by Citi, Commonwealth Bank of Australia, National Australia Bank and Westpac Institutional Bank.
On 21 September, Suncorp-Metway priced and doubled the volume on its latest residential mortgage-backed securities (RMBS) deal, Apollo Series 2017-2. The seven-tranche transaction had indicative volume of A$750 million (US$600.2 million).
On 21 September, Heritage Bank revealed plans to engage with investors in relation to its residential mortgage-backed securities (RMBS) programme, HBS. A potential Australian dollar RMBS may follow, according to the meetings’ arrangers ANZ, National Australia Bank and Westpac Institutional Bank.
Deutsche Bahn (AA-/Aa1) opened the books on its debut benchmark Kangaroo transaction on 20 September. Price guidance on the forthcoming deal is 85 basis points area and 95 basis points area respectively over semi-quarterly swap on the seven- and 10-year tranches. The transaction is expected to price as early as 21 September, according to lead managers Daiwa Capital Markets and HSBC.