News
On October 30, Newcastle Permanent Building Society (NPBS) (BBB+/A2) launched and priced a new two-year, floating-rate, senior-unsecured deal in the domestic market after a long absence from the public market. According to KangaNews data, the borrower last priced a public Australian dollar deal in March 2006 when it issued A$300 million (US$263.6 million) of three-year paper.
Following four consecutive rate hikes and then a hold decision at its September meeting, the Reserve Bank of New Zealand (RBNZ) left the official cash rate (OCR) on hold at 3.5 per cent when it met on October 30. The reference to further rate increases has been removed from the RBNZ's statement, and with only one meeting left before the end of the calendar year – on December 11 – many analysts now predict a stable OCR well into 2015.
On October 29, World Bank (AAA/Aaa/AAA) priced a tap to its June 2025 Kangaroo bond. This is the first increase to the line which was originally launched in June this year for a volume of A$300 million (US$266 million) and a margin of 55.5 basis points over Australian government bond.
Bluestone Group (Bluestone) priced its first Australian dollar residential mortgage-backed securities (RMBS) issue of 2014 on October 28. The transaction – Sapphire XIII Series 2014-1 Trust – matched its indicative volume of A$209.35 million (US$185.4 million) across nine tranches.
Bank of Queensland (BOQ) (A-/A3/BBB+) priced a five-year, senior-unsecured deal in the Australian domestic market on October 28, in what is the issuer's longest-tenor public, senior-unsecured deal issued without government guarantee, according to KangaNews data.
Volatility in global markets continued to hamper deal flow in Australasian markets for another week with only a rare domestic covered bond from Suncorp-Metway and taps from Queensland Treasury Corporation and Province of Ontario emerging in the public space. At least two issuers have initiated investor meetings, however.
Australia Rail Track Corporation (ARTC) (Aa2) has mandated a series of debt investor meetings offshore in the week of November 3 2014, which will be followed by investor meetings in Australia. A capital-markets transaction "may follow", according to a statement the meetings' arrangers.
Queensland Treasury Corporation (QTC) (AA+/Aa1) priced an increase to its existing July 2024 benchmark Australian dollar bond on October 23. According to KangaNews data, the transaction is the second syndicated tap of the line which was introduced in June 2011 at a volume of A$1 billion (US$877.5 million) and pricing of 61 basis points over Australian government bond (ACGB).
On October 23, Suncorp-Metway (Suncorp) priceda new five-year Australian dollar-denominated covered bond with an expected triple-A rating from Moody's Investors Service and Fitch Ratings.
Aside from the Australian Office of Financial Management (AOFM's) A$7 billion (US$6.1 billion), curve-extending benchmark nominal bond deal, the rest of the market during the week under review has been virtually silent as volatility returned to global markets with a vengeance.
The Australian Office of Financial Management (AOFM) priced a new, curve-extending April 2037 benchmark nominal bond by syndication on October 15. The price guidance was 60-65 basis points over the implied bid yield for the primary 10-year Treasury bond futures contract.