News
The ‘sleeper’ sustainability-linked loan has been mooted as a potential answer for businesses whose financing requirements do not conveniently line up with their sustainability target setting. By converting a substantial bank facility to sustainability-linked format, student accommodation provider Scape has demonstrated that the sleeper can awake.
A primarily domestic bid was enough to deliver a roughly two-times oversubscription to Queensland Treasury Corporation’s return to syndicated issuance. With limited new-issuance windows before year end, the state treasury corporation brought its latest deal in close proximity to other government-sector bookbuilds but says the deal cluster supported investor confidence rather than diluting liquidity.
Commonwealth Bank of Australia’s latest tier-two transaction was the tightest pricing achieved for a security of its type in the domestic market since April 2022. The borrower says it sought to take advantage of a promising market window and a relative dearth of new tier-two supply in recent weeks.
Woolworths was greeted by an almost four-times oversubscription in its return to the Australian dollar market, demonstrating once again the reception afforded to high-quality domestic corporate names. The transaction also experienced a significant margin compression, leading deal sources to comment on the strength of the Woolworths credit and the good timing of its execution.
The Australian Office of Financial Management says its new long-dated syndication was well sought after by investors including higher than usual participation from real-money accounts. The government debt management agency stuck to its plan to issue the new line before year end with options for clear execution windows starting to diminish.
The Australian Sustainable Finance Institute will disclose the latest intelligence from its sustainable finance progress tracker at its annual conference in Sydney on 24 October. Ahead of the update, the institute’s chief executive, Kristy Graham, shares a sneak preview with KangaNews covering some of the primary focus areas and priorities.
After a period in which the euro market was the option of choice for Australian corporates needing global benchmark deal volume, NBN Co’s return to the US dollar 144A market illustrates changing economics. The deal scored the borrower its largest price revision from the marketing range and lowest new issuance concession of its three US dollar deals to date, and deal sources anticipate follow-on supply despite market headwinds.
The Reserve Bank of Australia appears to be comfortable that rate hikes are transmitting more or less normally through the economy despite some abnormalities – such as the relatively higher proportion of fixed-rate mortgages going into the hiking cycle. While some lags remain in place, the suggestion is that the reserve bank is not expecting these to do much additional tightening work for it.
The demands of specialist lending funded by securitisation require Australasian nonbanks to ensure their books have maximum resilience to economic conditions. Arrears performance has so far held up very well in the current cycle and there are – albeit very early – signs that conditions may be improving for nonbanks.
The annual KangaNews-Natixis CIB nonbank lender roundtable, which took place in Sydney in August 2023, came at an interesting juncture for the sector. Nonbanks have responded to a period of elevated competition in the mortgage market by diversifying their books, and the combination of new assets and robust performance in their core sectors mean participants are facing the future with optimism.
A desire to diversify funding by accessing the deepest global market for covered bonds trumped lower funding costs at home for Bendigo and Adelaide Bank in its inaugural Euro covered deal.
After a near two-year hiatus from its home market, Auckland Council elected to use retail format for its latest green-bond transaction. The higher rates environment broadened retail demand, sharpening the pricing outcome for the issuer and illuminating a path that other high-grade issuers may choose to follow.