News
With three-quarters of the year in the books, two banks in particular hold commanding positions at the top of KangaNews's intermediary league tables for domestic transactions across Australia and New Zealand. The Kauri market also has a clear leader, but the race to top the 2015 Kangaroo league table looks set to go down to the wire.
Analysts and markets appear to see a potential upside for the Australian economic outlook in the wake of the country's latest change in prime minister – but only a limited one. Indeed, any positive market response to the dramatic events of September 14 in Canberra was quickly overtaken by global economic realities.
Telstra Corporation (Telstra) (A/A2/A) rebuffed what appears to have been an appealing opportunity to issue globally in favour of returning to the domestic market, the issuer tells KangaNews in the wake of its first domestic deal since November 2013. Intraday execution did not negatively affect the outcome of the deal but was a necessary inclusion given the market backdrop, it adds.
As was widely expected by analysts, the Reserve Bank of New Zealand (RBNZ) cut the official cash rate (OCR) by 25 basis points, to 2.50 per cent, on September 10. Analyst commentary focuses on the fact that the RBNZ maintains an easing bias, though most believe the reserve bank remains in "data watch mode".
Auckland Council cites a need for funding and investor diversification in its growing debt profile as the main attraction to issue its debut public Kangaroo deal on September 2. Distribution data provided by the deal's leads reveal the support of a substantial Asian bid.
Apple's (AA+/Aa1) record-breaking Australian issue significantly surpassed expectations by a long way, market participants say. Not only is the transaction the largest-ever corporate deal in the Australian market, but it did not disrupt primary flow elsewhere and was able to attract a wealth of demand despite, investor sources say, not offering bargain pricing.
Teachers Mutual Bank (Teachers Mutual) has become the first Australian financial institution to have its entire wholesale debt issuance programme certified as ethical. In response to increased interest in ethical investment options, the bank says, it sought ethical certification from the Responsible Investment Association of Australia (RIAA) for its A$500 million (US$368.1 million) debt issuance programme.
The latest offshore corporate issuer to debut in the Australian market says local capacity exceeded its expectations. Meanwhile, intermediaries insist that recovering spreads are supportive of a growing new-issuance pipeline.
The Australian Office of Financial Management (AOFM)'s Canberra-based chief executive, Rob Nicholl, and director of financial risk, Michael Bath, have shared insights with KangaNews around their assessment of the progress to date of the agency's divestment of residential mortgage-backed securities (RMBS).
Issuers and intermediaries predict the deluge of supranational, sovereign and agency (SSA) Kangaroo issuance is likely to continue, thanks to a range of market-altering technical factors. Uncertainty around Greece has affected not only the cross-currency basis swap but also appetite for Europe-origin credits, revealing issuance opportunities.
Australia's major banks have raised a combined equivalent of A$12.8 billion (US$9.5 billion) in global markets in July to date, despite a prolonged phase of Greek-debt and Chinese-equity-market induced global volatility. Bank funders assess the accessibility of global markets during the period and share their predictions for fundamentals going forward.
On July 20, the Australian Prudential Regulation Authority (APRA) revealed that from July 1 2016 it will be increasing the amount of capital required for Australian residential mortgage exposures by authorised deposit-taking institutions (ADIs) which use the internal ratings-based (IRB) approach. The latest measures affect Australia's major banks and Macquarie Bank – but leave the requirement for Australia's regional banks – which are already required to hold more capital – unchanged.