News
Australian domestic corporate deal flow continued into the last week of November despite recent signs of easing demand. The latest borrower to test the market was Sun Group Finance (Sun Group) (BBB+), the borrowing entity of Queensland Motorways, which priced a new minimum A$250 million (US$214.6 million), seven-year, fixed-rate transaction on November 27.
On November 26, Rabobank Nederland Australia Branch (Rabobank Australia) (A+/Aa2/AA-) launched and priced an increase to its September 2018 floating-rate senior-unsecured domestic line. According to KangaNews data, the line was introduced in September 2013 at a volume of A$500 million (US$426.7 million) and pricing of 113 basis points over bank bills.
On November 26, Teachers Mutual Bank (Teachers Mutual) (BBB+/A3) priced a debut deal in the domestic market. The deal launched at a minimum volume of A$50 million (US$43.0 million) with indicative pricing in the area of 105-110 basis points over banks bills.
AMP Bank priced its second Australian dollar residential mortgage-backed securities (RMBS) issue of 2014 on November 24. The transaction – Progress 2014-2 Trust – was upsized from its indicative volume of A$500 million (US$435.4 million).
Australian deal flow is starting to show clear signs of flagging as the market turns its eyes to year end, with only two domestic and one Kangaroo deal pricing in the past week. In the securitised market, Beyond Bank returned with its first deal since 2011.
Export Development Canada (EDC) (AAA/Aaa) mandated and priced increas to its existing 2019 Kangaroo bond on November 21. According to KangaNews data, the deal is the first increase of the line which was introduced in May this year for a volume of A$400 million (US$345.1 million) and pricing of 41.25 basis points over Australian government bond.
Beyond Bank priced its second-ever Australian dollar residential mortgage-backed securities (RMBS) issue on November 21.
MC Finance Australia (Mitsubishi Corp) (A+/A1) priced its second-ever deal in the domestic market on November 21.
As the debut Australian sovereign or semi-government issuer of renminbi-denominated bonds, New South Wales Treasury Corporation (TCorp) says it is firmly committed to playing an instrumental role in the continued development of the renminbi market. Although the deal itself was small in the context of TCorp's funding requirement, the issuer says it expects the significance of the renminbi to grow in the coming years.
Seasonal basis swap adjustment and flexibility on volume enabled Total to find a long-sought execution window for its debut Kangaroo transaction. The November 18 deal came hard on the heels of the borrower placing transactions in euros and sterling, and priced in line with guidance for a volume of A$350 million (US301.7 million).
Deutsche Bank has confirmed that its credit-default swaps (CDS) business in Australia – including acting as a counterparty to single-name transactions – is unaffected by the bank's decision to scale back its global operations in this market. Deutsche Bank revealed on November 17 that it would no longer act as a counterparty to uncleared single-name CDS trades in Europe and the US, but says it will continue to do so in other markets including Australia.