News
The Australian Office of Financial Management (AOFM) revealed on 8 November that it plans to resume selling down its remaining residential mortgage-backed securities (RMBS) portfolio, after putting the divestment process on hold in 2016. In the interim, capital repayments have seen the AOFM’s RMBS portfolio dwindle to less than A$1.7 billion of residual face value, according to its own data.
A growing segment of corporate Australasia is stepping up to the plate on sustainability, taking the lead among peers and in many cases government. The issues are complex, especially when it comes to transition management, but the wins are starting to stack up – including in the capital-markets arena.
A growing segment of corporate Australasia is stepping up to the plate on sustainability, taking the lead among peers and in many cases government. The issues are complex, especially when it comes to transition management, but the wins are starting to stack up – including in the capital-markets arena.
A quartet of Kangaroo deals priced in October took New Zealand-origin supply in the Kangaroo market to a new annual record. Deal sources say the evolution of the Australian credit market – especially increased consistency of liquidity at the 10-year mark – should keep the trans-Tasman option on the agenda for a clutch of Kiwi corporates.
In the wake of its third-ever Kangaroo transaction, NRW.BANK says the deal is another small step in the agency’s strategic commitment to the Australian dollar market. Issuing in Australia is not without challenges, NRW.BANK acknowledges, but it expects future funding opportunities to become more plentiful as European QE is removed.
Northern Territory Treasury Corporation (NTTC) returned to the domestic syndicated market on 24 October for its second transaction in three months and its fourth in a year, before which the issuer had been absent from the market for two-and-a-half years. A change in government and the resulting need to fund capital investment, including an infrastructure programme, has driven NTTC’s return, the issuer reveals.
Hard on the heels of its dual-tranche debut Kangaroo in September, Deutsche Bahn returned to the Australian market for a 15-year transaction on 23 October. The A$150 million (US$116.7 million) deal is the longest issued for a corporate Kangaroo post-crisis, according to KangaNews data. Deal sources insist the transaction further demonstrates the ability of the Australian dollar market to print at maturities competitive with offshore markets.
Ausgrid Finance (Ausgrid)’s selection of the Australian dollar market for its first public bond deal makes sense in the context of the issuer’s likely call on this market going forward, deal sources say. The issuer says it achieved a good pricing outcome while exceeding volume expectations, supported by solid market fundamentals and good demand for infrastructure assets.
Powerco returned to the US private placement (USPP) market in September, printing a NZ$125 million (US$87.3 million) 12-year deal and New Zealand’s first-ever floating-rate USPP. Investors, rather than the issuer, assumed the basis-swap risk during the transaction, explains Stuart Marshall, treasurer at Powerco in New Plymouth.
In September, KangaNews hosted representatives of Australia’s most significant nonbank lenders at the first-ever sector roundtable discussion. On the agenda were funding markets and investor relations, the outlook for the Australian housing market and regulatory oversight of the sector.
Support from debt investors is a critical component of Australian nonbank lenders’ business models, and the major nonbanks have investor relations high on their priority lists. These issuers have been able to fund their businesses through the credit cycle, and domestic fund managers say they see the appeal of the nonbank value proposition – with appropriately detailed credit work.
Having been absent for two-and-a-half years, a brace of United Arab Emirates (UAE)-origin issuers returned to the Kangaroo market in recent weeks. Deal sources suggest the return of price stability to the oil market in recent has proved to be a catalyst for a reopened Kangaroo market.