News
Australian and New Zealand deal activity slowed dramatically in the second week of February, with just one Kangaroo issue priced. Elsewhere, Commonwealth Bank of Australia released its half-year results on February 10, and revealed a measured response to growing external pressures.
A further strengthened capital position was emphasised by Commonwealth Bank of Australia (CommBank) in its February 10 half-year results presentation and in the media briefing which followed. The bank says it is cognisant of growing external pressures in funding markets but is taking a measured approach in response.
Australian-origin corporate issuance has been even slower than usual at the start of the new year, both at home and offshore. However, with reporting season fast approaching intermediaries believe global markets will continue to offer opportunities to Australian companies – albeit with challenges.
The first week of February saw steady deal flow, including from South Australian Government Financing Authority which printed the Australian market's second semi-government syndicated issue for 2016. Meanwhile, the Kauri market saw issuance from International Finance Corporation and KfW Bankengruppe.
On February 3, Inter-American Development Bank (IADB) (AAA/Aaa/AAA) priced a new, five-year bond in the Australian market. According to KangaNews data, IADB's most recent Kangaroo transaction was issued on January 28. That was a A$55 million (US$38.7 million) tap to its October 2025 line with pricing of 54.5 basis points over Australian Commonwealth government bond.
On February 4, KfW Bankengruppe (KfW) (AAA/Aaa/AAA) priced a new, five-year bond in the New Zealand market. According to KangaNews data, the transaction is the first issue from a European supranational, sovereign and agency borrower in the Kauri market in 2016. The five deals – for volume of NZ$1.35 billion (US$880 million) – which priced to February 2 all came from North American issuers.
On February 3, South Australian Government Financing Authority (SAFA) (AA/Aa1) priced a new Australian dollar fixed-rate select line. According to KangaNews data, SAFA's most recent syndicated transaction was in November last year. The A$750 million (US$531 million) tap to its April 2025 select line priced at 54 basis points over Australian Commonwealth government bond.
While the latest Reserve Bank of Australia (RBA) cash-rate decision – a hold at 2 per cent announced on February 2 – surprised virtually no-one, analysts draw varying conclusions from the accompanying statement. The big disparity is whether the reserve bank sees growing reasons for a rate cut or whether it remains relatively comfortable with global and local growth.