News
Having printed its first green bond on 28 March – also the largest to date by a bank in Australia – Commonwealth Bank of Australia (CommBank) says global demand and increasing issuer engagement with the asset class point the way to significant future growth. CommBank issued A$650 million (US$497.1 million) of five-year climate bonds including fixed and floating tranches.
Solid domestic real-money demand supported the long-dated, dual-tranche deal issued by WSO Finance (WSO), the financing entity of the Westlink Motorway Group and 50 per cent subsidiary of Transurban. The issuer tells KangaNews it had a strong preference to execute in the local market while lead managers note a positive shift in domestic investor sentiment.
In the wake of the largest-ever green bond to price in the Australian dollar market – a capped A$750 million (US$575.1 million) seven-year issue by Queensland Treasury Corporation (QTC) – lead managers predict further evolution of the sector in 2017, including corporate supply. The state treasury corporation itself says it sees green bonds forming a regular component of its funding mix.
National Australia Bank (NAB) (AA-/Aa2/AA-) printed A$500 million (US$384.5 million), upsized from A$250 million at launch, in a five-year fixed-rate social “gender-equality” bond on 17 March. The self-led transaction had initial price guidance of 95 basis points area over semi-quarterly swap.
Having priced its second-ever public senior-unsecured transaction – with greater volume than the first and a substantial oversubscription – CUA says market conditions were conducive to its growing funding need. The issuer printed A$300 million (US$227.1 million) in a new floating-rate note on 9 March.
Australian dollars remain an important and reliable route to market for CAF – Development Bank of Latin America (CAF) when its core markets are affected by volatility, the issuer tells KangaNews in the wake of its debut Australian dollar deal of 2017. The issuer says it is also beginning to reap the benefits of its engagement with domestic investors.
Leads on the first-ever total loss-absorbing capacity (TLAC)-compliant transaction denominated in Australian dollars say domestic interest in the deal was high despite complexities around pricing and other headwinds. Most importantly, they say there was apparent willingness to engage on the so-called “tier-three” asset class and little objection to the use of EMTN format.
Surging domestic demand enabled the Australian Office of Financial Management (AOFM) to ride out apparent reduced nonresident holdings of Australian Commonwealth government bonds (ACGBs) in its return to syndicated issuance. The debt-management agency printed A$11 billion (US$8.4 billion) in a new November 2028 nominal bond on 22 February, having printed A$9.3 billion of new 2021s barely a month earlier.
The Australian securitisation market received another boost on 24 February as Suncorp returned to residential mortgage-backed securities (RMBS) issuance with an upsized, oversubscribed deal. Apollo Series 2017-1 Trust (Apollo 2017-1) was a highly cost-competitive funding option, the issuer says, thanks in part to the capital relief generated by support from investors right down the deal structure.
Global events of 2016 have, among many other consequences, served to make Australia’s political environment look relatively stable by comparison. Australia may have developed a habit of changing prime ministers on a more regular basis than is strictly desirable – five times in less than a decade, only twice as the result of elections – but political risk has never been high on investors’ checklists when it comes to Australia.
Westpac Banking Corporation (Westpac) says investor appetite for diverse product supported robust print volume in its first asset-backed securities (ABS) deal of the year. The transaction achieved record volume, assisted by the inclusion of a jumbo privately placed A2 tranche in an unusual approach that Westpac says is efficient for issuer and investors.
Global events of 2016 have, among many other consequences, served to make Australia’s political environment look relatively stable by comparison. Australia may have developed a habit of changing prime ministers on a more regular basis than is strictly desirable – five times in less than a decade, only twice as the result of elections – but political risk has never been high on investors’ checklists when it comes to Australia.