News
People’s Choice Credit Union (PCCU) priced its residential mortgage-backed securities (RMBS) transaction, Light Trust 2017-1, on 30 March. The transaction is based around the class A1 notes, which were upsized from indicative volume of A$322 million (US$246 million) and pricing of around 120 basis points over one-month bank bills
On 23 March Sumitomo Mitsui Financial Group (SMFG) printed A$1 billion (US$764.6 million) of five-year notes in a SEC-registered total loss absorbing capacity (TLAC)-compliant benchmark issue. The transaction is the first Australian dollar Asian-origin TLAC-eligible deal and SMFG is the first-ever non-US-domiciled issuer to print a deal in Australian dollars in SEC format.
On 4 April, BNG Bank (AAA/Aaa) launched and priced an increase to its July 2027 Kangaroo bond. The transaction priced in line with guidance of 72 basis points over semi-quarterly swap and 89 basis points over Australian Commonwealth government bond.
Appealing pricing and extensive predeal marketing enabled Latitude Finance Australia (Latitude) to attract a multiple-times oversubscription to all tranches of its debut credit-card asset-backed securities (ABS) issue, according to deal sources. This was despite the combination of a new name, new collateral type and a new deal structure for the Australian market.
In the wake of Australia’s first domestic true-corporate green-bond deal, the transaction’s arranger says internal and external drivers point to growing momentum in the asset class. Investa Office Fund (IOF) was well positioned to be the first domestic mover, but it is far from unique as a potential issuer – especially in the property sector.
Socially responsible investment came into the spotlight during the final week of March, as Commonwealth Bank of Australia printed A$650 million (US$497 million) in its debut climate bond and Investa Office Fund issued Australia's first-ever domestic corporate green bond. Meanwhile, Latitude Card Trust priced its debut master-trust asset-backed transaction with an upsize to A$1.1 billion.
Having printed its first green bond on 28 March – also the largest to date by a bank in Australia – Commonwealth Bank of Australia (CommBank) says global demand and increasing issuer engagement with the asset class point the way to significant future growth. CommBank issued A$650 million (US$497.1 million) of five-year climate bonds including fixed and floating tranches.
Solid domestic real-money demand supported the long-dated, dual-tranche deal issued by WSO Finance (WSO), the financing entity of the Westlink Motorway Group and 50 per cent subsidiary of Transurban. The issuer tells KangaNews it had a strong preference to execute in the local market while lead managers note a positive shift in domestic investor sentiment.
New Zealand’s Heartland Bank (Heartland) (BBB from Fitch Ratings, with an expected issue rating of BBB-) placed a tier-two transaction in the Australian dollar market on 31 March. The deal had indicative volume of A$20 million (US$15.3 million) and price guidance of 415 basis points over bank bills for 10-year non-call five tenor.