News
Bank of Queensland’s return to the residential mortgage-backed securities market demonstrated a continued retreat in spreads for bank structured finance issuers. Periodic deal flow from banks does not represent a full-blown securitisation revival from the sector but suggests deal economics are stacking up for issuers outside the big four.
The Reserve Bank of New Zealand’s liquidity policy review could fundamentally reshape the way bank liquidity books – some of the country’s most important fixed-income investors, especially in the high-grade space – allocate their money. A worst-case outcome could weaken funding opportunities, the overall health of the New Zealand capital market and even the cost of credit across the economy.
Finding a way to reliably and meaningfully support environmental transition is perhaps the greatest contribution sustainable finance could make to achieving climate goals – and sustainability-linked bonds have been presented as critical tool for doing so. But flatlining issuance highlights what is perhaps the sector’s greatest challenge to date: how to agree, measure and monitor genuine transition ambition.
Every year, ANZ and KangaNews gather global market participants at a roundtable in London to discuss the state of play in fixed-income issuance and investment. The 2023 discussion, which took place in mid-June, took in the growing appeal of the asset class, dynamics that are reshaping currency and tenor of issuance, and ever-growing scrutiny in sustainable finance.
New Zealand’s liquidity policy review has already had an impact on the debt market and could cause a long-lasting shakeup of issuance norms. In June, KangaNews spoke to Kate Le Quesne, director, prudential policy at the Reserve Bank of New Zealand in Wellington, to discuss the regulator’s current thinking.
The scale of demand for New Zealand Local Government Agency’s first-ever Australian dollar deal allowed the borrower to become just the second high-grade issuer to debut in the Kangaroo market with a transaction of A$1 billion (US$675.1 billion) or more. The issuer elected to execute during a quiet period for Australian dollar new issuance and was rewarded with pricing that is says is highly competitive with – and had a tightening impact on – its domestic curve.
The A$1.6 billion equivalent green loan recently completed by Vector Metering demonstrates the potential for use-of-proceeds financing to support energy transition and asset growth, deal sources say. The deal – the first in the world to come to market under updated Climate Bonds Initiative standards – could also in time be termed out in the green-bond market.
On 11 July, ANZ announced a swathe of new senior appointments to its global sustainable finance team. Katharine Tapley, head of sustainable finance at ANZ in Sydney, spoke to KangaNews about the makeup of the team, the relevance of key hires’ skill sets and how they align with the bank’s wider sustainable finance strategy.
Nearly three decades after the birth of the supranational, sovereign and agency Kangaroo market, the sector has grown and evolved despite multiple changes of demand drivers. Meanwhile, Kauri market development has been impressive but it will have to work through a new challenge to reach its next phase.
With the second New Zealand-origin covered bond to print in the euro market in less than three weeks, ANZ New Zealand further demonstrated investor appetite for the asset class amid what deal sources say was an improving market tone. ANZ New Zealand achieved notable price tightening, supported by capped deal size and a significantly oversubscribed book.
A change in deal structure gave RedZed an improved cost of funds from its most recent residential mortgage-backed securities transaction compared with its previous public deal, despite identical margins on the class A1 notes. Issuer and arranger say securitisation demand remains constructive and hope for further margin compression in future supply.
The International Sustainability Standards Board published its long-awaited first two global sustainability disclosure standards at the end of June, with the goal of building a rigorous and comparable reporting framework that facilitates sustainable finance. On the day IFRS S1 and IFRS S2 launched, KangaNews caught up with Jingdong Hua, vice chair of the International Sustainability Standards Board, in Singapore to discuss the new standards and how they might be incorporated by national regulators.