News
In his November commentary on the monthly Reserve Bank of Australia (RBA) cash-rate decision, KangaNews columnist, Warren Bird, says his analysis of the changes in wording used by the reserve bank does nothing to contradict the consensus view that the RBA's outlook is fundamentally unchanged since October.
The Australian Prudential Regulation Authority (APRA) released the final version of its APS 210 rules on November 4. The new regime contains few changes from existing expectations, other than a second revision in just over two months of the liquid-asset rules which will be applied to foreign-bank branches operating in Australia.
Three of Australia's big-four banks reported full-year results around the turn of the new month, with ANZ Banking Group (ANZ) making the most notable moves in terms of its capital position. Elsewhere the story is mainly one of consistency, though ANZ, National Australia Bank (NAB) and Westpac Banking Corporation all further increased the size of their liquid-assets books.
Provisional ratings were assigned to two new Australian dollar securitised deals, from Macquarie Leasing and Citigroup, on November 3. Macquarie's fourth asset-backed securities (ABS) issue of 2014 – SMART ABS Series 2014-4 Trust – has an indicative volume of A$500 million (US$437.4 million), as does Citigroup's SAMT 2014-1 residential mortgage-backed securities (RMBS) transaction.
Australian bond activity ramped up during the last full week of October. Issuance of note included a A$1 billion (US$879.9 million) Kangaroo debut from Toronto Dominion Bank, a A$1 billion debut Basel III-compliant tier-two wholesale transaction for Commonwealth Bank of Australia, and a record-breaking, single-tranche, triple-B corporate deal for AGL Energy.
Deal sources say domestic investors showed strong support for AGL Energy (AGL)'s inaugural senior-unsecured Australian dollar deal, allowing the borrower to price the largest-ever single-tranche triple-B corporate deal at tight pricing. Lead managers point to a revival of the market following a month of volatility and also flag a strong late-year pipeline for others to follow suit.
On October 31, Toronto Dominion Bank (TD Bank) priced an Australian dollar denominated, Canadian legislative covered bond transaction backed by Canadian prime residential mortgage loans. The deal is TD Bank's inaugural Kangaroo transaction.
On October 31, Commonwealth Bank of Australia (CommBank) (AA-/Aa2) priced a new, self-led, 10-year floating-rate Basel III tier-two transaction in the Australian dollar market. The deal follows institutional investor meetings which took place in Sydney and Melbourne on October 28 and 29 respectively.
Wide Bay Australia (Wide Bay) has priced its first Australian dollar residential mortgage-backed securities (RMBS) issue of 2014, which according to KangaNews data is also the borrower's first since it completed a A$250 million (US$220.4 million), four-tranche deal in December 2010.
On October 31, the New Zealand Debt Management Office (NZDMO) announced the appointment of Deutsche Bank, HSBC, UBS and Westpac Institutional Bank as the lead managers for a new September 2035 inflation-linked issue. At the same time, the NZDMO revealed it expects to issue up to NZ$1.5 billion (US$1.2 billion) in the new bond's debut.
On October 30, AGL Energy (AGL) (BBB) launched and priced a new seven-year fixed-rate senior unsecured deal. Indicative pricing guidance for the new issue is in the 170 basis points over semi-quarterly swap area.