News
The most recent issuer to price a residential mortgage-backed securities (RMBS) transaction in the Australian market reveals a wider investor base for its latest deal even than its jumbo transactions from 2014. Hints that 2015 volumes may exceed previous years may be supported by early-year issuance activity, the latest deal's lead manager says – but the true level of market capacity is yet to be tested.
International Finance Corporation (IFC) (AAA/Aaa) priced an increase to its April 2025 Kangaroo bond on February 24. This is the fourth tap to IFC's longest outstanding line in the Australian market.
With substantial deal volume now in the books in 2015, KangaNews's Kangaroo intermediary league tables see a familiar pair of intermediaries in the top two spots, though a number of other movers are close behind. A total of 13 banks have led Kangaroo deals so far in 2015, accounting for a total of A$8.7 billion (US$6.8 billion) of issuance.
The slow but steady pace continued across all markets during the week under review with two issuers - Oesterreichische Kontrollbank and ConnectEast Finance - successfully returning to the market following an absence. Elsewhere, half-year results prompted a raft of ratings updates. *Registrations are still open for the 2015 KangaNews DCM Summit on March 16 & 17 in Sydney and the KangaNews NZ Capital Markets Forum 2015 on March 19 in Wellington. For an up-to-date agenda and instructions on how to register for the Sydney conference click here, and for the Wellington conference click here.*
Newcastle Permanent Building Society (NPBS) (BBB+/A2) launched and priced a new senior-unsecured three-year floating-rate Australian dollar deal on February 20. The transaction was upsized from a minimum A$150 million (US$116.8 million) volume at launch.
Commonwealth Bank of Australia (CommBank) priced its first residential mortgage-backed securities (RMBS) transaction of 2015 on February 20. The transaction – Medallion Trust Series 2015-1 – has been upsized from an indicative volume of A$1 billion (US$776.3 million) across three tranches at launch.
Issuer and leads on ConnectEast Finance's (Baa2) recent domestic market return say the deal was well received by investors both domestically and offshore, demonstrating that the domestic market can provide attractive tenor and pricing. The issuer says the local market is seeing new competition in its apparent duration sweet spot of seven years.
ConnectEast Finance (ConnectEast) (Baa2) priced its second-ever domestic deal on February 18. The seven-year fixed-rate senior-secured transaction was upsized from a minimum volume of A$150 million (US$116.4 million) at launch.
Oesterreichische Kontrollbank (OKB) (AA+/Aaa) priced a new Kangaroo transaction on February 18, in what is the issuer's first Australian domestic deal since 2011. It has also not issued since losing universal triple-A ratings status – and, with it, Australian repo eligibility – in January 2012.