News
The issuer and lead managers on the euro market's first Australian-origin non-financial corporate credit transaction of 2015 say ongoing investor demand for yield enabled the borrower to achieve its largest and longest euro-denominated transaction. Lead managers provide commentary around cross-currency basis swap levels and discuss how these might be offset by other market fundamentals.
The week under review saw steady activity across all markets. BMW Australia Finance took advantage of a quirk of timing to move ahead of local issuers in order to price Australia's first domestic corporate transaction of 2015. *Registrations are now 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.*
Credit Union Australia (CUA) priced a new Australian dollar residential mortgage-backed securities (RMBS) deal on February 13. Series 2015-1 Harvey Trust Prime RMBS priced A$750 million (US$580.7 million) across its five tranches, making it CUA's largest RMBS transaction since it issued the same volume in June 2007.
Bank of Queensland (BOQ) (A-/A3/A-) priced a new 2.25-year domestic benchmark senior-unsecured transaction on February 12. The deal is BOQ's first domestic issue of 2015, and follows a busy 2014 in which the bank sold A$1.1 billion (US$841.4 million) of domestic senior benchmark bonds as well as A$950 million of residential mortgage-backed securities according to KangaNews data.
Inter-American Development Bank (IADB) (AAA/Aaa/AAA) priced an increase to its February 2020 Kangaroo on February 12. According to KangaNews data, the line was first introduced in July 2014 at volume of A$350 million (US$270.1 million) and pricing of 40.25 basis points over Australian government bond (ACGB).
Emirates NBD (ENBD) (Baa1/A+) priced a new seven-year Australian dollar transaction on February 12. According to KangaNews data, the issuer priced its debut five-year Kangaroo deal in April last year.
The A$500 million (US$388.4 million), three-year transaction priced by BMW Australia Finance (BMW Australia) (A+/A2) offers some notable insights into the state of demand for Australian dollar corporate credit at the start of 2015. BMW Australia had not issued since 2003 but took advantage of a quirk of timing to move ahead of local issuers in its market return.
On February 11, BMW Australia Finance (BMW Australia) priced a new three-year, fixed-rate domestic bond deal which was upsized from an indicative volume of A$300 million (US$234.1 million). The new issue also priced 5 basis points tighter than its target of 70 basis points over semi-quarterly swap at launch.
Commonwealth Bank of Australia (CommBank) has mandated investor meetings ahead of a potential residential mortgage-backed securities (RMBS) transaction under its Medallion programme. The Australian dollar deal is expected to launch and price in the week beginning February 16.