News
Australia’s latest domestic corporate issuer tells KangaNews that robust demand and solid momentum in the nonfinancial corporate space provided it with an unprecedented level of execution confidence. The recent trend for 10-year tenor and more competitive pricing further drives domestic appeal.
In the wake of the first Korean-origin Kangaroo transaction of 2017, The Export-Import Bank of Korea (Kexim’s) Seoul-based treasurer, Hee Sung Yoon, tells KangaNews greater domestic takeup of the deal is down to the issuer’s long-term engagement with the market. Kexim printed the A$500 million (US$383.7 million) deal on 7 February, in the first-ever three-tranche deal from a Korean credit in Australia.
Queensland Treasury Corporation (QTC) took a step towards becoming Australia’s second semi-government green-bond issuer on 15 February, as it disclosed that it has secured preissuance certification from the Climate Bonds Initiative (CBI). QTC says it plans to arrange investor meetings “in the coming weeks” to discuss a green-bond transaction.
Following the completion of the bookbuild of National Australia Bank (NAB)’s new tier-two deal – Australia’s first retail-targeted transaction for this asset class in three-and-a-half years – the deal’s arranger suggests there is a compelling reason for other issuers to consider a return to the listed arena.
Following the completion of the bookbuild of National Australia Bank (NAB)’s new tier-two deal – Australia’s first retail-targeted transaction for this asset class in three-and-a-half years – the deal’s arranger suggests there is a compelling reason for other issuers to consider a return to the listed arena.
The generally upbeat tone of most Australian dollar issuance sectors at the start of 2017 appears to extend to the securitisation market, according to the issuer and arranger of the first deal to price this year. Bank of Queensland (BOQ) doubled the size of the new residential mortgage-backed securities (RMBS) deal it issued on 9 February, to A$1 billion (US$763.7 million), having not issued a benchmark securitisation since September 2015.
AusNet Services (AusNet) accumulated final interest of A$800 million (US$609.8 million) for its A$425 million August 2027 domestic line printed on 7 February. This makes the deal the Australian market’s largest 10-year transaction for a corporate since 2007. The outcome was driven by growing domestic demand for 10-year paper and the issuer’s desire to price in line with its global curve.
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A research report published by National Australia Bank (NAB)’s global markets credit research team on June 16 estimates that, in aggregate, the big-four Australian banks may need to raise more than A$120 billion (US$88.7 billion) of total loss-absorbing capacity (TLAC) by the regime’s implementation date.
Intermediaries say investor diversification continues to provide the Kauri market with appeal to global issuers, and despite some question marks over pricing appeal the market opened to a solid flow of activity in 2017. Kauri issuance typically tapers off in the second half of the calendar year, but market users are optimistic about 2017 due to a period of substantial redemptions.