News

Pepper Money believes an improving tone could spell better cost of funds in the securitisation market, noting good demand across asset classes and particular interest in nonmortgage asset-backed securities. Pepper priced its latest auto and equipment securitisation, SPARKZ Trust 7, on 17 August and has a nonconforming residential deal in the pipeline.

Harmoney took advantage of ongoing limited supply of securitisation – and good-quality, diverse credit in all formats – in New Zealand to print its debut public deal. The issuer now plans to be a regular securitisation issuer at home and in Australia, while its arranger says the New Zealand market remains conducive to new supply in various formats.

Ausgrid’s return to the US private placement market for a second jumbo transaction indicates the inrease in optionality for issuers in this sector, deal sources say. The multitranche deal is notable for the inclusion of Canadian dollar and sterling notes – from which the issuer derived a pricing benefit – which further highlight the scale of potential demand for Australian corporate credit.

Avanti Finance has taken advantage of a key strategic acquisition, consumer demand and a changing financier market to deliver growth in its Australian auto book. It has now priced its first local auto asset-backed securities deal, and says it plans regular issuance from this programme as well as New Zealand auto securitisation.

Kauri market watchers are paying particularly close attention to the behaviour of bank balance sheets given regulatory uncertainty about their future demand. The distribution of World Bank’s latest four-and-a-half-year tap offers deal sources grounds for optimism, as it featured a slightly increased bank book allocation than the line’s debut in January this year.

Commonwealth Bank of Australia used the window immediately after its results to bring a new senior offering to the domestic market with record-breaking results. These include a final book size of A$7.8 billion (US$5.1 billion) – a figure believed to be the largest on record.

The terms of and demand for La Trobe University’s debut in the debt capital market – a seven-year green bond – held firm despite a rating agency methodology change that put the university’s rating on downgrade review between pricing and settlement. Demand, including specific green demand, during the deal marketing process allowed the issuer to tighten pricing and increase volume.

DBS Bank Sydney Branch’s latest transaction – a debut covered bond from the bank’s Australian branch – took the issuer’s and Singaporean bank Australian dollar issuance further into record territory. DBS Bank reaffirms its strategic positioning in the Australian funding market, saying its latest deal found early demand and maintained momentum throughout the execution process.

Supportive local conditions convinced Westpac New Zealand to return to its domestic market for its latest tier-two transaction rather than – as it suggested would most likely be the case following its previous subordinated debt deal – going offshore. The issuer says the limited supply of five-year senior bank paper this year helped ensure institutional investors were receptive to a tier-two deal.

A step-change in supply dynamics has combined with positive demand factors to boost secondary turnover in Australian semi-government bonds. Local real-money investors generally agree with the suggestion that semi-government tradability has reached a new level, while bid-side liquidity is strong even for less heavily traded names.

Demand has been building during a quiet period for new issuance in the Australian dollar market, allowing Westpac Banking Corporation to print a new three-year deal at a competitive margin. The issuer says market conditions were its primary motivating factor as its funding need is limited approaching the end of the bank’s 2022/23 financial year.

Macquarie University has plumped for full disclosure of the KPIs in its inaugural sustainability-linked loan, acknowledging that such an approach introduces reputational risk should it miss its targets but arguing that accountability is more important. The loan structure also takes steps toward tackling sustainability factors that are currently harder to measure.