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New Zealand’s capital market faced several headwinds in 2023 but managed to navigate a course to issuance consistent with recent years. A late year regulatory update could suggest smoother sailing ahead for at least one key sector, though deal flow from 2023 provides few hints at a radical change in supply or demand patterns.
Kangaroo supranational, sovereign and agency issuance got off to a roaring start in the first week of 2024. World Bank, CPPIB Capital and KfW Bankengruppe printed a combined A$5 billion (US$3.4 billion) into the Australian market across a three-day period, nearly A$1.5 billion more than the three issuers executed in the first week of 2023. Elsewhere, the credit market popped its head up for another year with mandates from Westpac Banking Corporation and ANZ Banking Group.
Australia’s sovereign and semi-government issuance market rode the waves of ongoing rates market upheaval in 2023, with issuers reporting solid demand despite myriad challenges. The sector appears to be in fundamentally good health, with semi-government issuers noting growing liquidity in their part of the market on the back of several years of elevated supply.
After back-to-back record issuance years, it is clear that increased capacity for Australian dollar financial institution bonds is not just a post-pandemic rebound but representative of at least some degree of system growth. A raft of domestic and international banks benefited in 2023, including finding ample liquidity across the capital stack.