News

The Australian auto lending market is undergoing a similar structural shift to that experienced by the nonprime mortgage lending market a few years ago: a wide-scale withdrawal by bank balance sheets and a proliferation of new and existing nonbank lenders. Auto-backed securitisation issuance is booming as a result.

Supranational, sovereign and agency issuance in Australian dollars has had a knock-out year, with new supply surpassing an annual record that had stood for nearly a decade and a half. Supply has resumed after a particularly acute mid-year lull, but intermediaries’ attention is now turning to next year as the new-issuance ground looks less fertile in the near term.

QBE Insurance Group is the latest borrower to find ample demand for Australian dollar tier-two issuance, securing a more than four-times oversubscribed orderbook for its second subordinated deal of the year. The transaction forms part of the group’s new Australian dollar focus, having previously completed most of its funding in US dollars.

Maximising its access to capital across the stack was the primary motivating factor for Judo Bank to bring its first-ever additional tier-one deal to market. The issuer elected to use retail format for the deal despite revived regulatory scrutiny of this avenue of distribution but says its small scale of issuance means the wholesale option would likely be available should it be needed in future.

Bendigo and Adelaide Bank welcomed a record number of investors into the orderbook of its latest tier-two transaction. Most of these accounts were already active in the bank’s wider funding programme but have only now taken the decision to step down the capital structure to tier-two level.

Commonwealth Bank of Australia took the revival in bank securitisation issuance to a new level just before the end of the third quarter, doubling the size of the residential mortgage-backed securities deal it priced on 26 October and further tightening senior pricing. The issuer confirms that it expects securitisation to be a component of its wholesale funding mix on an ongoing basis.

Australia’s energy transition has accelerated. But it is not a straight-line journey to net zero and signs are that each progressive step brings new challenges. With the low-hanging fruit now mostly picked, martialling investment capital for equally vital future progress will be no easy task.

After years of lagging uptake in other global economies, uptake of electric vehicles in Australia is finally starting to accelerate. Clean Energy Finance Corporation and KangaNews hosted institutional participants in the sector at a September roundtable in Sydney, to discuss the detail on infrastructure and financing behind the headline uptake numbers.

Each year, Commonwealth Bank of Australia and KangaNews survey Australian fixed-income asset managers to get an update on the lay of the land in local sustainable capital markets, then invite investors to add qualitative thoughts to the data at a roundtable discussion. The 2023 outcome paints a picture of a market that continues to mature but still has a number of hurdles to clear.

Social factors have tended to be the black sheep of the sustainable finance family: harder to measure than emissions and frequently less prioritised than the need to respond to the existential threat of climate change. Participants at a KangaNews-Westpac Institutional Bank roundtable, which took place in Sydney in September, discussed moves to improve the measurability of social impact, the sector’s challenges and why the link between the pillars of environmental, social and governance (ESG) might make the term redundant.

The nature crisis may be less widely discussed than the climate crisis but – as well as being a tragedy on its own terms – it represents no less of a threat to human wellbeing. Sustainable finance has the chance to learn from decades of gradually evolving expertise in the climate space to deliver faster action on biodiversity, according to participants at an ANZ-KangaNews roundtable that took place in Sydney in September. But the window to act will not stay open forever.

The new governor of the Reserve Bank of Australia, Michele Bullock, has used her first public speech in the role to affirm its laser focus on inflation – noting that the other aspects of the bank’s mandate may be subordinate to, or have complementary outcomes with, inflation direction. Analaysts and markets largely view the central bank’s November cash rate decision as a line-ball call with the 25 October CPI print for Q3 likely to be a key input.