News
Unrated deal flow resumed for 2015 with the launch of two new deals. On March 20, McPherson's announced plans for a wholesale, senior-unsecured bond issue for up to A$60 million (US$45.9 million) while on March 16, Dicker Data revealed its intention to seek A$40 million via the same structure.
BHP Billiton Finance (BHP Billiton) (A+/A1) launched and priced a new benchmark issue of Australian dollar senior-unsecured notes on March 19, in what is the issuer's first domestic deal since 2012. The new five-year transaction priced inside guidance of 90 basis points over semi-quarterly swap.
On March 13, AMP priced a A$275 million perpetual subordinated notes issue. The deal follows a series of meetings with wholesale investors which took place in Sydney and Melbourne beginning on March 9. According to KangaNews data, AMP most recently issued capital notes at the end of 2013, when it placed A$325 million (US$253 million) in a listed tier-two transaction.
The effect of reduced market-making capacity in fixed income – both in Australia and globally – is an intended consequence of banking regulation, the Reserve Bank of Australia (RBA) confirms. However, speaking at the KangaNews DCM Summit in Sydney, RBA assistant governor, financial markets, Guy Debelle, says he believes developments that are currently in their infancy may act to mitigate the impact of constrained bank trading books over the coming years.
Australian securitisation was the most active market during the week under review, with five new deals pricing for a combined equivalent volume of more than A$4.5 billion (US$3.4 billion). In New Zealand, Bank of New Zealand and Auckland Council each printed a new domestic transaction.
Resimac priced its first nonconforming residential mortgage-backed securities (RMBS) of 2015 on March 13, which is also the first such deal in Australia this year. The transaction – Resimac Bastille Trust Series 2015-1NC – which was upsized from an indicative volume of A$300 million (US$229.4 million) across eight tranches, is backed by a mixed pool of conforming and nonconforming residential mortgages.
Bank of Queensland (BOQ) priced its first REDS series prime residential mortgage-backed securities (RMBS) issue of 2015, with expected ratings having been assigned to the new deal on March 9. Series 2015-1 REDS Trust (REDS 2015-1) has a five-tranche structure with a total volume of A$900 million (US$693.1 million).
Holcim Finance Australia (Holcim) (BBB/Baa2/BBB) priced a new minimum A$200 million (US$152.8 million) fixed-rate senior-unsecured deal on March 12. Indicative pricing guidance for the new five-year transaction was in the area of 145 basis points over semi-quarterly swap.
Westpac Banking Corporation (Westpac) priced the second Australian dollar non-mortgage asset-backed securities (ABS) transaction of 2015 on March 12. The deal, Crusade ABS Series 2015-1 Trust, was launched on March 9 with indicative volume of A$500 million (US$384.7 million) across six tranches, with more than 80 per cent of total volume in the class A notes.
The Reserve Bank of New Zealand (RBNZ)'s second official cash rate (OCR) decision of 2015 gave analysts even fewer clues around future direction than they have seen in recent months. The reserve bank left the rate on hold at 3.50 per cent on March 12 and the mixed nature of the accompanying statement led to a widespread read on the tone as deadpan neutral.
On March 11, National Australia Bank (NAB) priced its first residential mortgage-backed securities (RMBS) transaction of 2015. The self-led deal – National RMBS Trust 2015-1 – has a total volume of A$1.75 billion (US$1.3 billion) across three tranches.