News

Fitch Ratings (Fitch) and Standard & Poor's (S&P) have downgraded their sovereign ratings on New Zealand, citing the country's net external debt position as the reason for the move. New Zealand now has a local currency rating of AA+ and foreign currency rating of AA from both Fitch and S&P, one notch below their previous levels. The outlook on all these ratings is stable.

Fleet Partners' New Zealand subsidiary, Fleet Holdings NZ (Fleet NZ), has completed its debut asset-backed securities (ABS) transaction in the form of a NZ$300 million (US$227.9 million) private placement, bought by ANZ National, Bank of New Zealand and Westpac Banking Corporation. The deal is just the third securitisation in New Zealand in the financial crisis era and the country's first non-mortgage deal.

Auckland International Airport (Auckland Airport) (A-) closed its first domestic bond issue since 2009 in the form of a six-year retail offering on September 29. The fixed-rate transaction, which has an interest rate of 5.47 per cent and spread of 150 basis points over government bonds, has a volume of NZ$100 million (US$77.8 million).

Securitisation deal flow resumed after an almost month-long absence in the week ending September 23, with two new public deals pricing and a third launched. Following a pair of deals at the back end of last week, the primary Australian credit market returned to stillness. The only activity in New Zealand was a new Kauri deal.

Preliminary ratings on a new residential mortgage-backed securities (RMBS) issue from Columbus Capital (Columbus) have been assigned, with the forthcoming issue having an indicative size of A$110 million (US$112.9 million). The proceeds of the transaction are set to redeem existing notes issued by Columbus in July 2008 at a volume of A$208 million.

On September 21 National Australia Bank (NAB) priced its second Australian residential mortgage-backed securities (RMBS) transaction this year at a size of A$1.5 billion (US$1.5 billion). National RMBS Trust Series 2011-2 is the fifth new RMBS to be issued by an Australian big four bank in 2011 and adds to the A$1 billion of RMBS NAB sold in May.

A new asset-backed securities (ABS) deal from CNH Capital priced on September 21. The transaction closed at its indicative volume of A$350 million (US$360.1 million) and is CNH Capital's first securitisation since April 2010, when it placed another A$350 million across four tranches.

The week ending September 16 saw the first non-government domestic deal flow in the Australian market since late July, with two new credit issues pricing. Semi-government issuance remained at a trickle with one new deal completed, while the New Zealand primary market also saw one new bank transaction.

The amendment to Australia's Banking Act that will pave the way for a domestic covered bonds regime has now cleared the parliamentary process, having passed through the upper house on the nod on October 13 and received royal assent on October 17. The bill completed its passage through the lower house – with bipartisan support – on October 12 and was immediately fast-tracked in the Senate.

Three more days without domestic credit issuance will see the Australian bond market surpass its longest deal flow drought of the crisis era. No new transactions have priced – outside the semi-government, and supranational, sovereign and agency (SSA) Kangaroo sectors – in Australia since July 22 this year and aggregate annual volume has fallen behind record levels for the first time in 2011.

Tasmanian Public Finance Corporation (Tascorp) (AA+/Aaa) launched and priced a new September 2017 fixed rate domestic deal on September 13. The transaction was upsized from a launch volume of A$500 million (US$517.1 million) to A$540 million, and priced in the middle of the indicative range at 91.5 basis points over the Australian Commonwealth government bond.

Following the publication of the New South Wales (NSW) state budget on September 6, NSW Treasury Corporation (TCorp) released its revised funding target for the 2011/12 financial year ending June 30 next year. The requirement, at A$10.2 billion (US$10.7 billion), is A$1.3 billion lower than the previous estimate made at the turn of the financial year thanks to an equivalent reduction in forecast client funding, to A$4 billion.