News
Kiwibank confirmed on May 29 that two instruments it initially issued as regulatory capital securities will no longer qualify as such, following confirmation of a preliminary view on these securities’ status by the Reserve Bank of New Zealand (RBNZ). The disclosure of the preliminary view caused angst in the New Zealand market in March as it came between pricing and settlement of a Kiwibank senior Kangaroo deal, which the issuer was forced to pull.
On May 29, Pepper Australia (Pepper) mandated the refinancing of the US dollar-denominated class A1-u2 notes of Pepper Residential Securities Trust No 14, with a tranche of new class AR-u notes. The AR-u notes have indicative volume of A$90 million (US$66.9 million) and launch is expected later in the week.
Western Australia Treasury Corporation (WATC) (AA+/Aa2) mandated banks for a new Australian dollar October 2026 syndicated benchmark on 29 May. The forthcoming deal is expected to launch in the same week, according to joint lead managers Commonwealth Bank of Australia, Deutsche Bank, National Australia Bank and Westpac Institutional Bank.
Westpac New Zealand (Westpac) (AA-/Aa3/AA-) launched a new, five-year, senior-unsecured New Zealand domestic retail deal on 29 May. The forthcoming transaction is for up to NZ$100 million (US$70.4 million) the issuer reveals, with the potential to accept unlimited oversubscriptions.
On 29 May, Commonwealth Bank of Australia (CommBank) launched its new Medallion Trust Series 2017-1 residential mortgage-backed securities (RMBS) transaction. The seven-tranche funding and capital-relief deal has indicative volume of A$750 million (US$558.2 million) and is expected to price on or around 2 June, according to arranger and lead manager, CommBank.
Credit Union Australia (CUA) launched its new Series 2017-1 Harvey Trust residential mortgage-backed securities (RMBS) transaction on 29 May. The six-tranche deal is for minimum A$500 million (US$372.1 million) volume and is expected to price on 2 June, according to the arranger, National Australia Bank, and additional joint lead managers, Deutsche Bank, Macquarie Bank, National Australia Bank and Westpac Institutional Bank.
The credit ratings of 23 Australian financial institutions were downgraded one notch by S&P Global Ratings (S&P) during the last full week of May. One of the affected institutions was Liberty Financial (Liberty), but despite being downgraded during the bookbuild phase Liberty still printed an upsized and oversubscribed senior-unsecured transaction. Meanwhile, Westpac Banking Corporation priced 2017's first Australian covered-bond benchmark.
Liberty Financial (Liberty) printed an upsized and oversubscribed senior-unsecured transaction despite falling victim to an S&P Global Ratings (S&P) action that downgraded the issuer alongside 22 other Australian financial institutions. Liberty triggered a 50 basis points step-up built into its programme to retain investors, and says the higher margin on offer may have attracted additional bids.
Australia’s securitisation market continues to generate well bid and competitively priced transactions, with AMP Bank printing the market’s latest upsized and oversubscribed deal. The issuer highlights robust international demand throughout the capital structure as well as the pricing benefit achieved from the deal’s capital-relief structure.