News
The US presidential elections kept issuance to a minimum either side of the eventual result. Noteworthy issuance came from World Bank, which printed a rare 15-year Kangaroo, and South Australian Government Financing Authority, which returned to the syndicated market. Elsewhere, and ahead of Australian Securitisation 2016, the Australian Prudential Regulation Authority made some concessions in its final APS 120 draft.
On November 8, Bluestone Group (Bluestone) printed its second residential mortgage-backed securities (RMBS) transaction of 2016. Sapphire XV Series 2016-2 Trust has an aggregate volume of A$200 million (US$152.3 million) and a 10-tranche structure. Fitch Ratings (Fitch) assigned expected ratings to the transaction, on November 7.
The Australian Prudential Regulation Authority (APRA) released the final draft version of the new prudential standard APS 120 – the regulatory framework for securitisation – on November 10, following industry consultation. Changes to the last draft are limited, and focus mainly on adding flexibility at the margin on capital deductions, funding-only securitisations and warehouse capital relief.
South Australian Government Financing Authority (SAFA) (AA/Aa1) priced A$750 million (US$577.8 million) of August 2024-maturity benchmark bonds on November 8. The issuer launched the syndicated deal a day earlier and disclosed book sizes of A$800 million at the close on November 7 and A$980 million early on the day of pricing.
International investors were prominent in the latest domestic transaction from Auckland International Airport (Auckland Airport), as offshore buyers accounted for nearly half the book. Meanwhile, the issuer attributes the success of its largest-ever domestic print to continued support from institutional buyers as the retail bid appears to have eased at least temporarily.
On November 4, Commonwealth Bank of Australia (CommBank) (AA-/Aa2/AA-) printed A$2.3 billion (US$1.76 billion) in its first covered bond transaction since 2014. Indicative guidance on the self-led deal was 85-88 basis points over swap and 100-103 basis points over swap for the five- and 10-year lines respectively, from earlier mid-to-high 80s and low 100s spread indications.
Australian market activity slowed in the first week of November while New Zealand domestic corporate issuance ploughed ahead. Z Energy printed NZ$150 million (US$109.5 million) of five-year and NZ$70 million of seven-year notes in a dual-tranche transaction and Powerco issued a NZ$100 million six-year deal.
On November 4, Inter-American Development Bank (IADB) (AAA/Aaa) printed a A$30 million (US$23 million) increase to its April 2027 Kangaroo bond. According to KangaNews data, the line was introduced in October this year for volume of A$125 million and pricing of 50 basis points over swap.
Following its return to the Australian commercial mortgage-backed securities (CMBS) market, Thinktank Commercial Property Finance (Thinktank) says expanding its investor reach beyond the scope of its first CMBS transaction proved fruitful. While the investor pool for CMBS is currently somewhat contained, Thinktank is hopeful comprehensive investor-relations work will further engage the wider securitisation community.
On November 3, Mercedes-Benz Australia Pacific (Mercedes-Benz Australia) (A-/A3/A-) mandated an Australian dollar-denominated three-year transaction. The transaction will be issued off the borrower's EMTN programme and will be listed in Luxembourg.