News
South Australian Government Financing Authority (SAFA) revealed on July 11 that it expects to make an early start on the curve extension it announced following the July 7 state budget. SAFA has scheduled a tendered buyback of up to A$405 million (US$306.2 million) of its December 2017 benchmark select line for July 14, and the following week expects to launch a syndicated increase of its July 2026 select line for up to A$500 million.
Australian-origin deal flow continued in the first full week of July, as two of the big-four banks tested credit investor appetite for the first time since Brexit. Elsewhere, S&P Global Ratings placed negative outlooks on the big four's AA- ratings on July 7, following similar outlook changes for the sovereign and a raft of semi-government and government-sector borrowers
Following the first real test of Australian-origin credit appeal locally and offshore since the UK voted to leave the European Union (EU) on June 23, bank treasury representatives say they see little or no Brexit-induced effect on funding markets. International investors remain comfortable with Australian credit, they add.
Despite Australian-origin US private placement (USPP) issuance lagging 2015's volumes, intermediaries say issuers continue to rely on this market because of its resilience to broader uncertainty. Even the UK referendum decision did not derail two recent USPP transactions.
WSO Finance (WSO) (A3/A-), the financing entity of the Westlink Motorway Group and a 50 per cent owned subsidiary of Transurban, priced its new domestic senior-secured issue on July 7.
Shopping Centres Australasia Property Group (SCA Property) (Baa1) – the funding entity of the Shopping Centres Australasia Property Retail Trust –priced an increase to its April 2021 senior-unsecured domestic line on July 7. Initial price guidance was in the area of 170 basis points over semi-quarterly swap.
Australia's major banks are the latest issuers to suffer collateral damage from S&P Global Ratings (S&P)'s decision to revise its outlook on the Australian sovereign's triple-A rating to negative. S&P placed negative outlooks on the big four's AA- ratings on July 7, following similar outlook changes for the sovereign and a raft of semi-government and government-sector borrowers.
On July 6, Commonwealth Bank of Australia (CommBank) (AA-/Aa2/AA-) printed A$2.275 billion (US$1.7 billion) in a new, five-year domestic senior-unsecured transaction following a mandate announcement the previous day. Initial price guidance for the forthcoming self-led deal was plus 120-123 basis points area over three-month bank bill swap rate (BBSW) or semi-quarterly swap.