News

The Australian government delivered its response to the financial-system inquiry (FSI) on October 20, accepting virtually all the inquiry's recommendations – including all those relevant to debt markets. The response offers a ringing endorsement of the Australian Prudential Regulation Authority (APRA)'s path on bank capital requirements and lays out an agenda for provision of retirement income within the superannuation system.

On October 20, Macquarie Bank (Macquarie) (A/A2/A) confirmed the forthcoming launch of a new, three-year, senior-unsecured domestic benchmark bond. This announcement follows an update call with Australian and Asian investors which took place on October 19.

Local and offshore demand for Australian and New Zealand high-grade issuance has not been tempered by global volatility, according to the issuers of A$6.5 billion (US$4.7 billion) equivalent in a trio of deals. The local government and semi-government issuers say the transactions afforded up-to-date insights into investor views on Australia and its links to China.

Deal flow ramped up during the week under review, with A$5.875 billion (US$4.28 billion) priced in Australia alone. The Australian Office of Financial Management and the New Zealand Debt Management Office were in the spotlight, both pricing new nominal bonds via syndication. 

KfW Bankengruppe (KfW) (AAA/Aaa/AAA) priced a tap to its April 2020 Kangaroo bond on October 16. According to KangaNews data, the deal is the third increase to the line which was introduced in January this year at volume of A$750 million (US$548 million) and pricing of 54 basis points over Australian government bond (ACGB).

On October 16, International Finance Corporation (IFC) (AAA/Aaa) mandated and priced a tap to its April 2025 Kangaroo bond. According to KangaNews data, this line was introduced in September 2014 and has been subsequently increased eight times, most recently by A$25 million (US$18.3 million) on October 2 at 46 basis points over Australian government bond.

On October 15, Western Australian Treasury Corporation (WATC) (AA+/Aa1) priced an increase to its July 2025 benchmark bond, in the borrower's fourth syndicated deal of 2015. According to KangaNewsdata, WATC priced its previous syndication on August 18. This A$750 million (US$542.3 million), July 2020 increase priced at 54.25 basis points over Australian government bond.

On October 16, Province of Manitoba (Manitoba) (AA/Aa2) mandated and priced an increase to its March 2025 Kangaroo bond. According to KangaNews data, the deal is the third tap of the line which was introduced in August 2014 at volume of A$100 million (US$73.3 million) and pricing of 71 basis points over Australian government bond (ACGB).

Rentenbank (AAA/Aaa/AAA) mandated and priced an increase to its May 2026 Kangaroo on October 15. According to KangaNews data, the deal is the second tap of the line which was introduced in April last year with volume of A$100 million (US$73.2 million) and pricing of 66.25 basis points over Australian government bond (ACGB). The line was later increased by A$50 million in May that same year with pricing of 63 basis points over ACGB.

On October 15, the New Zealand Debt Management Office (NZDMO) priced a new 3.50 per cent 2033 maturity nominal New Zealand government bond via syndication. The NZDMO targeted volume of NZ$1-2 billion (US$650.6 million-US$1.3 billion), with the transaction capped at NZ$2 billion, and had initial price guidance in the area of 33-38 basis points over the April 2027 nominal bond.

The Australian Office of Financial Management (AOFM) (AAA/Aaa/AAA) priced a new 3.25 per cent 2039 nominal bond on October 13. The transaction priced at the tight end of indicative price guidance of 68-73 basis points to the implied bid yield for the primary 10-year treasury bond futures contract.