News
The latest half-year financial and economic review data show the New Zealand economy is moving from "rock star to rock solid" while Australia's budget targets are increasingly becoming a moving target, analysts say. The respective debt management offices are faced with accordingly divergent funding tasks.
KfW Bankengruppe (KfW), the Kangaroo market's largest issuer, is moving closer to bringing its "Green Bonds – made by KfW" programme to the Australian market. A funding update published by the agency on December 15 names Australian dollars as one of two currencies in which it is exploring offering green bonds in 2015.
MyState priced a new residential mortgage-backed securities (RMBS) transaction on December 11. The deal is the fourth public RMBS issue to be launched off MyState's ConQuest securitisation programme.
Trustpower (NR) allotted NZ$105 million (US$76.9 million) in a new unsecured fixed-rate seven-year senior bond issue on December 15. The new deal has an interest rate of 5.63 per cent and will mature on December 15 2021.
A pick up in sentiment resulted in two domestic corporate deals pricing just before the market prepares to shut for the Christmas break, intermediaries say. They predict the corporate bond market will continue to take strides in 2015, with 10-year tenors in focus.
The December slowdown appears to have finally arrived, with limited deal activity in all markets. Standard & Poor's Ratings Services published its final methodology for accessing lenders' mortgage insurance. This was followed by the lowering of ratings on 61 tranches of Australian and New Zealand residential mortgage-backed securities and an affirmation on an additional 82 tranches.
On December 11, John Deere Financial (John Deere) (A/A2) priced a new deal in the Australian market. According to sole lead manager, Westpac Institutional Bank, John Deere launched the deal with indicative pricing in the area of 93 basis points over semi-quarterly swap.
Market participant opinion is divided over whether uncertainty around lenders' mortgage insurance (LMI) rating methodology in residential mortgage-backed securities (RMBS) is resolved by the publication of Standard and Poor's Ratings Services (S&P)'s final criteria. Some expect an earlier shift in ratings preference which saw S&P excluded from a clutch of deals will continue.
Australian Gas Networks (AGN) (BBB+/Baa1), formerly Envestra, priced a new seven-year domestic deal on December 13. The transaction was upsized from a minimum A$250 million (US$207.4 million) volume and priced in line with guidance of 160 basis points area over semi-quarterly swap.
The Reserve Bank of New Zealand (RBNZ) left the official cash rate (OCR) on hold – for the third consecutive time – at 3.5 per cent at its December 11 meeting. Analysts identify the reintroduction of an explicit tightening bias, compared with the removal of the reference to future rate increases in the October 30 statement, but predict only very gradual hikes ahead.
Bendigo and Adelaide Bank (BEN) priced its second Australian dollar residential mortgage-backed securities (RMBS) issue of 2014 on December 10. The transaction – Torrens Series 2014-2 Trust – has a total volume of A$600 million (US$503.9 million) across five tranches.