News

On February 15 LeasePlan Australia (BBB+/A3/A-) mandated its first domestic transaction since June 2007, with the company pricing a new A$200 million (US$199.9 million) three-year line one day later. The deal was upsized from a launch volume of A$100 million.

KfW Bankengruppe (KfW) (AAA/Aaa/AAA) priced a new February 2018 Kangaroo on February 16, with the introduction of the new bond completing the issuer's range of Kangaroo maturities from 2011 to 2020. The deal, which is also be KfW's fourth Kangaroo transaction of the year, was for A$500 million (US$500 million).

In what was 2011's first debut Kangaroo transaction from a supranational, sovereign and agency (SSA) issuer, on February 16 Oesterreichische Kontrollbank (OKB) (AAA/Aaa/AAA) issued a A$350 million (US$349.9 million) five-year Australian dollar deal. The Austrian export finance agency roadshowed in Australia in April last year with the intention of becoming a regular borrower in the Kangaroo market.

On February 15, Queensland Treasury Corporation (QTC) (AA+/Aa1) priced A$4 billion (US$4 billion) in a new 2018 benchmark, equalling the record for the largest one-off Australian dollar bond issue. The transaction is QTC's first syndicated bond deal since October 2010 and the first time the treasury corporation has employed lead managers for the listing of a completely new line for nearly a year.

The Kangaroo market continues to flourish with three sizeable deals coming to market in the past week. While Kangaroo transactions from the supranational, sovereign and agency (SSA) sector have previously in 2011 been dominated by domestic accounts, Export Development Canada (EDC) (AAA/Aaa/AAA) and Rentenbank (AAA/Aaa/AAA) both witnessed an increased proportion of offshore participation in their deals, with a notable increase in Asian involvement.

This week saw the first murmur of activity emerge in the New Zealand market as the first Kauri deal of the year – which was also the first public transaction in any asset class in 2011 – was completed. Although there are two domestic corporate transactions in the offing, New Zealand market participants say they expect the measured start to the year to continue for the time being.

In what the supranational's second Kangaroo transaction of 2011, Asian Development Bank (ADB) (AAA/Aaa/AAA) priced a new seven-year Australian dollar line on February 10. As well as the latest, A$700 million (US$706 million), transaction ADB has also added A$1 billion (US$1 billion) of Kangaroo paper this year having tapped its February 2016 line by that amount on January 11.

The ageing demographic of superannuation scheme members and regulatory changes to the overall system could have a beneficial impact on the flow of assets into fixed income, according to the author of Mercer's recently-published checklist for superannuation trustees and fund providers. However, there may need to be further government intervention to promote the type of products required by retirees seeking stable income.

Rentenbank (AAA/Aaa/AAA) priced an increase to its April 2017 Kangaroo line on February 9. The tap is Rentenbank's third Kangaroo of 2011, and its second in a week having increased its January 2016 maturity by A$175 million (US$177.4 million) on February 4. The line being increased was inaugurated in March last year, and has now been tapped four times to bring the total amount outstanding to A$1.6 billion.

GE Capital Australia (AA+/Aa2) has issued a new A$750 million (US$761 million) February 2014 dual-tranche domestic bond in advance of one of the issuer's outstanding lines falling due, on February 10. The A$500 million fixed rate tranche of the new deal priced at 110 basis points over semi-quarterly swap, while the A$250 million floating rate piece achieved a margin of 110 basis points over the three-month bank bill swap rate. 

Export Development Canada (EDC) (AAA/Aaa/AAA) issued a new A$500 million (US$506.6 million) five-year benchmark Kangaroo bond on February 8. The transaction is EDC's third Kangaroo deal and its second point on the AUD curve. EDC debuted in the Kangaroo market in August 2010, issuing A$650 million (US$658.4 million) in an August 2015 bond which it tapped in September to bring the line's outstanding to A$1 billion.

FEfforts by a number of global banks to ramp up their presence in the Australian dollar market are starting to feed through into presence on the top line of Kangaroo deals in particular. While a number of banks returned to the Kangaroo intermediary space as lead managers in 2010, the effect has been much more marked in market share terms in the first weeks of 2011.