News
For the first time in the current cycle, the New Zealand Debt Management Office (NZDMO) includes a government commitment to maintaining a minimum supply of New Zealand Government bonds (NZGBs) on issue in its latest funding update. The update, which was released on 25 May following the New Zealand budget, says the government intends to maintain minimum NZGB supply of “not less than 20 percent of GDP over time”.
Aurizon Network (Aurizon) (BBB+/ Baa1) revealed on 25 May that it is planning to meet Asian and Australian debt investors, having arranged a series of meetings to begin on 1 June. The meetings’ arrangers – ANZ, Commonwealth Bank of Australia, Mizuho Securities and National Australia Bank – say a potential Australian dollar-denominated capital-markets transaction may follow.
On 25 May, Volkswagen Financial Services (VWFS) (BBB+/A2) and Volkswagen Financial Services Australia revealed plans to host a fixed-income investor call on 29 May. ANZ and RBC Capital Markets are arranging the call, after which a potential 3-5 year senior-unsecured Australian domestic transaction may follow.
Credit Union Australia (CUA) is now taking indications of interest on its Series 2017-1 Harvey Trust residential mortgage-backed securities (RMBS) transaction. Price guidance is disclosed on all tranches of CUA's indicative A$500 million (US$374.7 million) RMBS.
Commonwealth Bank of Australia (CommBank) revealed on 25 May that it is engaging with investors on a potential self-led residential mortgage-backed securities (RMBS) transaction from its Medallion programme. A forthcoming deal will be for funding and capital-relief purposes.
On 24 May, EUROFIMA (AA+/Aa1) launched an indicative A$20 million (US$14.9 million) tap to its January 2027 Kangaroo bond. The forthcoming deal is being marketed at 68 basis points over semi-quarterly swap or 83 basis points over Australian Commonwealth government bond.
Mid-curve Kangaroo market pricing has swung back into a range that some global supranational, sovereign and agency (SSA) borrowers consider to be an acceptable premium for diversification purposes, market participants say. A recent-year issuance decline shows signs of having bottomed out – though it is yet to rebound – and market users say demand for the SSA product is steadily broadening.
The 5.25-year covered-bond transaction for Westpac Banking Corporation (Westpac) (AA-/Aa2/AA-) progressed to launch on 24 May. The forthcoming, dual-tranche deal has indicative volume of A$1 billion (US$747.7 million) in floating-rate format and a further A$300 million in fixed, and price guidance is in the area of 78 basis points over bank bills and semi-quarterly swap respectively.
The minimum A$100 million (US$74.4 million) three-year, senior-unsecured deal for Liberty Financial (Liberty) (BBB-/S&P) progressed to launch on 24 May. Price guidance is in the area of 325 basis points over semi-quarterly swap, the issuer reveals, with the transaction expected to price on the same day as launch.