News

In the wake of the Australian federal government’s long-awaited decision to initiate the process toward the issuance of sovereign sustainability bonds, KangaNews surveyed local investors on what they want to see from a sovereign green-bond programme. The answers – and further detail provided by some buy-side accounts – show what the Australian Office of Financial Management may need to consider as it ramps up its preparation.

The publication of the 2023 Fitch Ratings-KangaNews Fixed Income Investor Sentiment Survey marks the 10th anniversary of this unique insight into the thinking of the Australian buy side. With a decade of data history now available, KangaNews has reviewed outcomes from across the years to identify trends and preferences that only emerge over time.

Asian Infrastructure Investment Bank says its new theme bond – which it debuted in the Australian market on 10 May – highlights its commitment to financing climate-resilient infrastructure. The bank issued a A$500 million (US$335.3 million) Climate Adaptation Bond, which is also the first theme bond under its Sustainable Development Bond Framework.

National Australia Bank set a new record in its domestic market on 4 May with a A$5.25 billion senior-unsecured deal. The issuer says the transaction – the largest-ever Australian dollar deal by a bank – demonstrates a scale, and quality, of demand that likely represents a degree of system growth.

ANZ Banking Group printed what it believes is the world’s first “national champion bank” tier-two benchmark deal after the Silicon Valley Bank crisis on 8 May. It attracted a predominantly domestic real-money book in another demonstration of this investor base’s preference for tier-two as its higher-yielding credit asset of choice.

Western Australian Treasury Corporation will begin a global roadshow in late May ahead of its planned debut green-bond transaction, with the state funding agency highlighting the interoperability advantages of a largely government-owned asset base. Labelled bond issuance will be limited by the relatively small size of the state’s funding need rather than availability of qualifying assets.

A largely unexpected hike from Australia’s central bank, higher swap spreads and investor interest supported two KfW Bankengruppe Kangaroo taps in the week ending 5 May, taking the issuer’s total Australian dollar issuance in 2023 to a new record for January-May.

Tight new-issue concessions, ample liquidity, the availability of tenor and favourable cross-currency economics are among the drivers sending a host of Australian corporate names on a funding expedition to Europe in recent weeks, deal sources say. Three such deals priced and another two circling since mid-April have been the subject of comment in the European market and demonstrate the clear advantage euro issuance offers in the H1 corporate funding window.

High inflation continues to require a policy response that is squeezing New Zealand economic outcomes, but the Reserve Bank of New Zealand’s May 2023 Financial Stability Report suggests a baseline level of confidence in the foundations. The reserve bank is also sufficiently comfortable with local credit standards to have unwound a key macroprudential measure.

Reverse enquiry prompted World Bank to tap a 10-year maturity in a transaction that also drew the attention of a significant cohort of domestic investors, deal sources say. As expectations for inflation near a plateau, the issuer may come close to a record year in the Kangaroo market.

Western Australian Treasury Corporation published its Sustainability Bond Framework on 2 May, confirming at the same time that it expects to issue under the framework before the end of its current financial year on 30 June. The framework includes green and social use-of-proceeds options, though the state treasury corporation suggests its debut transaction will be a green bond.

Stable market conditions set the backdrop for New South Wales Treasury Corporation’s latest syndicated trade, with final volume supported by uptake from what the issuer describes as a range of high-quality accounts. The positive investor response also laid the groundwork for early positive secondary performance.