News
Suncorp Group maintained a recent trend for significantly oversubscribed Australian dollar deals by financial institutions with its return to the domestic tier-two market on 20 September. The issuer notes wide support for the deal despite ongoing uncertainty about the potential acquisition of Suncorp Bank by ANZ Banking Group, saying market depth may reflect fundamental system growth.
Chorus has joined the growing group of New Zealand corporate issuers to add the Australian dollar market to their funding – and deal sources say there may be more to follow. Chorus says its decision to introduce an Australian dollar programme was strategic and that it plans to be a repeat issuer.
The Bank of Japan’s decision to ease its longstanding yield curve control policy, allowing the 10-year Japanese government bond yield to rise as high as 1 per cent, reverberated through global bond markets. While there is no expectation of an immediate, wide-scale change in Japanese investor behaviour, Australian fixed income sectors with a longstanding reliance on the Japanese bid have reasons to watch the policy path closely.
One of the main factors put forward to explain why Australian true corporate issuance continues to underperform in an otherwise largely positive local credit market is suboptimal execution practice. KangaNews goes inside the deal process with parties on all sides of transactions to understand why many market users believe execution is letting the local corporate market down.
With weakness in the US regional bank sector prominent in debt investors’ thinking and consolidation never far from the front pages, Australia’s nonmajor banks might have expected a challenging funding environment in 2023. Instead, solid balance sheets and the generally positive environment for financial credit have helped issuance maintain a steady path.
Despite an active month for new issuance that saw more than A$25 billion of new credit supply, deal sources say ANZ Banking Group’s three- and five-year senior print on 31 August – itself the largest-ever domestic deal by a big-four bank – still left demand on the table. The scale of liquidity seen in August bodes well for Australian credit issuance in the short and long term.
Australian dollars became Clifford Capital’s first funding currency outside US dollars when the issuer printed its first Kangaroo deal, on 23 August. The issuer talks to KangaNews about aspirations in the market that limited only by the issuer’s growing Australian dollar operations, given the scale of oversubscription its debut deal attracted.
Australian dollars became Clifford Capital’s first funding currency outside US dollars when the issuer printed its first Kangaroo deal, on 23 August. The issuer talks to KangaNews about aspirations in the market that limited only by the issuer’s growing Australian dollar operations, given the scale of oversubscription its debut deal attracted.
Pre-deal investor engagement, transparency on pricing and volume, and improved market tone helped ING Bank Australia print its largest-ever securitisation deal as it ramps up issuance ahead of a substantial term funding facility refinancing. Deal sources say locking in bids ahead of pricing is an increasingly common feature in securitisation deals as issuers seek to manage potential volatility during execution.
Another robust outcome for an Australian securitisation deal – Brighte’s return to the public capital market – demonstrates demand that should fuel a supply pipeline for the rest of the calendar year, deal sources say. Brighte ran an open execution process without pre-placement of bonds and still found investor interest across the capital stack.
NBN Co says it attracted a diverse investor base – including a book of more than 60 unique accounts – to its latest deal, which was its third-ever green bond and second in the domestic market. The transaction also makes NBN the largest corporate borrower in Australia by outstanding volume.
Consistent opportunities and growing capacity for offshore financial institution issuers are likely to bring NatWest Markets back to the Australian dollar market more frequently in future, the issuer says in the wake of its second Kangaroo deal. Lead managers also predict further near-term Kangaroo deal flow as issuers rush to take advantage of conducive conditions and unsated demand.