News
The Australian Securitisation Forum returned to London to host its annual investor seminar on 5 June. Speakers at the seminar, who included Australian issuers and international investors, discussed their outlook for Australian securitisation half-way through what has been a stellar year for new issuance.
Commonwealth Bank of Australia (CommBank) (AA-/Aa3/AA-) revealed on 17 July that has mandated a new, self-led dual-tranche senior-unsecured domestic benchmark transaction. The forthcoming deal will be comprised of five- and 10.5-year tranches and has initial price guidance in the high 80s basis points over three-month bank bill swap rate and semi-quarterly swap and 105 basis points area over semi-quarterly swap respectively.
Issuer and lead sources on Bank of Queensland (BOQ)’s debut conditional pass through (CPT) covered bond say the deal paves the way for more Australian-origin issuance for the broadly European asset class. The deal helped BOQ achieve a key target in its funding strategy as well as provided a welcome level of ratings stability in an uncertain backdrop.
Macquarie Leasing launched a no-grow A$588.25 million (US$460.15 million) auto asset backed-securities (ABS) deal – SMART ABS Series 2017-2 Trust – on 17 July. The deal is expected to price on or before 21 July, according to arranger Macquarie Bank and additional lead managers ANZ and National Australia Bank.
Australia’s May-June budget season marked a change in direction for sovereign and semi-government bond issuance in the years ahead. While the aggregate funding task for the states is about to grow once more, the Commonwealth government finally produced a budget with a lower year-on-year issuance requirement – assisted by a cash grab from the local banking sector.
The state of Victoria is at the forefront of the general uptick in Australian semi-government issuance, as it exits a phase of state asset transactions and enters one of major infrastructure investment. The state’s treasurer and its funding agency, Treasury Corporation of Victoria (TCV), talk to KangaNews about the purpose of the new-debt requirement and how it will be funded.
The state of Queensland bucked the trend for much larger state funding requirements for the year ahead in its latest budget, delivered on 13 June. However, with the issuance task expected to rise again from 2018/19, the state government and Queensland Treasury Corporation (QTC) say sticking to a consistent and careful path of budget and funding management is key.
International banks are establishing a track record of issuing bonds compliant with their local rules on total loss-absorbing capacity (TLAC) denominated in Australian dollars – albeit outside the Australian domestic market. At the same time, market users in Australia are starting to wonder if the Australian Prudential Regulation Authority (APRA) might be moving away from any plans to develop a local TLAC regime.
On 17 July, Bendigo and Adelaide Bank (BEN) mandated banks to engage with investors in relation to its Torrens residential mortgage-backed securities (RMBS) programme. An Australian dollar funding and capital relief RMBS deal may follow, according to lead managers Deutsche Bank, Macquarie Bank, National Australia Bank and Westpac Institutional Bank.
Australian dollar total loss-absorbing capacity deal flow resumed during the second week of July with Banco Santander printing A$800 million (US$620.5 million) in a three-part, senior nonpreferred EMTN. Meanwhile, University of Technology Sydney netted A$300 million in the first Australian university domestic deal since 2015.