News
On February 4, Rabobank Nederland Australia Branch (Rabobank Australia) (A+/Aa2/AA-) priced a new five-year Australian dollar benchmark deal. According to KangaNews data, the issuer last issued in the domestic market in November last year when it priced a A$500 million (US$382.7 million) tap to its September 2018 floating-rate note (FRN) line. This deal had pricing of 80 basis points over bank bills.
Analysts were not only surprised by the Reserve Bank of Australia (RBA)'s decision to cut the cash rate, to 2.25 per cent from 2.50 per cent, on February 3 but were also left hanging. Limited guidance offered by the RBA leaves analysts in the dark about future direction – though markets appear more sure, pricing in a new trend for the rest of 2015.
A constructive tone in the Kauri market drew four supranational, sovereign and agency (SSA) issuers to place deals in January 2015. Deal volume added up to NZ$2.1 billion (US$1.6 billion) – a monthly record for the Kauri asset class – and market participants highlight encouraging demand trends behind the flow.
The issuer of the second Australian-origin tier-two deal to hit the renminbi market in quick succession tells KangaNews about the appeal of the market – and shares views on its likely capacity and consistency. The latest deal captured follow-on demand from the first and benefited from a cost-boosting market move.
Analysts have started responding to the shock result in Queensland's January 31 election, which saw the standing Liberal-National government's massive majority wiped out in one swoop. They expect a clear market response to an expected change in policy direction, but see a less significant credit impact.
Deal flow on both sides of the Tasman Sea continued at a slow but steady pace during the last week of January. Among the notable deals, Royal Bank of Canada Sydney Branch issued its second-ever domestic deal. The dual-tranche transaction follows its three-year debut from October 2013.
On January 30, Royal Bank of Canada Sydney Branch (RBC Sydney) priced a new Australian dollar senior-unsecured domestic benchmark transaction. According to KangaNews data, the deal marks the second time the borrower has issued in the domestic market, following a A$1.5 billion (US$1.18 billion) three-year debut in October 2013. That deal had pricing of 65 basis points over bank bills.
The Reserve Bank of New Zealand (RBNZ) surprised few in its first official cash rate (OCR) decision of 2015, leaving the rate on hold at 3.50 per cent on January 29. Analyst attention focuses on a change in tone of the accompanying reserve bank statement, with a clear divergence in expectation emerging around future direction.
On January 28, Nordic Investment Bank (NIB) (AAA/Aaa) priced a new five-year, fixed-rate, senior-unsecured Kangaroo deal in what is its first Australian dollar transaction of 2015.
On January 28, KfW Bankengruppe (KfW) (AAA/Aaa/AAA) priced the fifth increase of its July 2018 Kangaroo. According to KangaNews data, the line was first introduced in January 2013 at a volume of A$1 billion (US$793.1 million) and pricing of 91 basis points over Australian government bond (ACGB).