News

The outperformance of KfW Bankengruppe (KfW)’s Kangaroo green bond in the secondary market relative to its vanilla bonds during 2017 has prompted two taps of this line in less than three months, the issuer says. KfW also discusses the opportunity set for the agency in the Kangaroo green-bond market.

Speaking at a roundtable hosted by KangaNews, representatives of Australia’s largest nonbank lenders expressed a degree of confidence that the regulatory impost hanging over the sector may not fundamentally damage their business models. But they are watchful and wary of what they see as the potential for regulatory overreach.

The latest iteration of the biannual Australian Fixed-Income Investor Survey, conducted by Fitch Ratings (Fitch) and KangaNews in September, suggests the buy-side tone on economic fundamentals is warming. At the same time, however, investors are wary about the extended period of spread compression they have experienced across debt asset classes.

The latest instalment of the KangaNews-Moody’s Investors Service (Moody’s) Corporate Borrowers’ Intentions Survey – published annually since 2014 – maintains a longstanding trend of only gradual shifts in corporate debt policy. At the margin, Australasian corporates appear to expect more capital-markets activity but there is no sign of a rush to credit-funded investment.

In September, BNZ and KangaNews brought together a group of the most significant issuers and investors in the New Zealand debt market – from on- and offshore – for their annual roundtable discussion. In one of the most insightful conversations in this long-running series, Kiwi market participants analyse the present and future state of play.

Despite countless doubters and detractors, the European Central Bank (ECB) joined the multi-asset-buying policy trail in Q1 2015. To some, this unprecedented, extensive and expansionary monetary action saved the euro, or at least prevented an economic recession turning into a potentially irreparable depression. Market participants are now asking what comes next.

The state treasurer for Western Australia (WA), Ben Wyatt, says a recently released Productivity Commission report recommending a radical overhaul of goods and services tax (GST) distribution among states puts the impetus firmly on the Commonwealth government to follow through.

The report of Australia’s Productivity Commission into the way goods and services tax (GST) receipts are shared will, if adopted, entail a major revenue spike for Western Australia (WA). WA has seen its GST grants from the Commonwealth grants fall to less than 30 cents in the dollar GST raised in the state at times, but the Productivity Commission’s recommendations could see WA’s GST grant revenue increase by as much as A$3.6 billion a year (US$2.8 billion).

A marginal – but surprising – expansion of the committed liquidity facility (CLF) provided to banks by the Reserve Bank of Australia (RBA) for 2018 could boost demand for CLF-qualifying credit, a Deutsche Bank research note suggests. A concurrent marginal easing of demand for sovereign bonds should easily be offset by expected reduced supply, analysts believe.

In the wake of a brace of recent additional tier-one (AT1) deals from big-four Australian banks, heads of funding tell KangaNews they expect the domestic retail market to continue to provide the bulk of this type of capital. This is despite a massive oversubscription greeting a rare foray into foreign-currency AT1 issuance by Westpac Banking Corporation (Westpac).

In March this year, Western Australia (WA) had its first change of government in eight years. Following the September delivery of his first budget, the state’s treasurer, Ben Wyatt, talked to KangaNews about the new government’s targets of financial prudence, and how its revenue and expenditure measures should reassure investors, markets and rating agencies.

The arranger of Australia’s latest social benefit bond (SBB) says institutional investors are taking a more proactive interest in the asset class – though substantial allocations remain a work in progress. The frequency of impact-investment transactions has grown in 2017, but to attract the institutional investor base market participants say more scale is still needed.