News
New South Wales Treasury Corporation (TCorp) added Barclays Bank (Barclays) to its capital indexed bond dealer panel on December 2, with the bank becoming the third addition to a TCorp panel this year. However, Barclays is the first new member of the inflation-linked panel, with the other two new firms both joining TCorp's nominal global and domestic dealer groups.
On December 8, National Australia Bank (NAB) (AA/Aa1/AA) completed an offer to buy back its March 2012, government-guaranteed fixed and floating rate line, having successfully retired A$730 million (US$718 million) of paper. Investors were offered a buyback price of swap flat, compared to the margin of 60 basis points over swap and bank bill swap rate (BBSW) when the bonds were originally priced in March 2009.
Australian fund managers say they are relatively unconcerned about the credit quality of domestic securitised paper, but their views on pricing and liquidity are still some way from making them cost-efficient funders of wider competition in the mortgage market. And while there is some optimism about the progress the market has made in 2010 real money managers also admit there is a long way to go.
The Australian Prudential Regulation Authority (APRA) has revealed plans to introduce an eased capital treatment regime for residential mortgage-backed securities (RMBS), with the intention of allowing authorised deposit-taking institutions (ADIs) more access to capital relief while market conditions remain challenged. However, the regulator stresses the new treatment will be a transitional measure.
Australian residential mortgage-backed securities (RMBS) issuers are calling for further government support to aid the market's recovery, including an extension and broadening of the Australian Office of Financial Management (AOFM)'s investment mandate. But there is resistance to the idea of instituting any kind of permanent government involvement in the market, such as a Canadian-style mortgage agency.
In the wake of the November 23 placement of the A$400 million (US$386.8 million) inaugural Kangaroo bond from the International Finance Facility for Immunisation (IFFIm) (AAA/Aaa/AAA), the issuer's treasury manager, World Bank, has exclusively talked to KangaNews about why IFFIm is unique among supranationals and the factors underpinning its triple-A ratings.
Diversity in the senior unsecured bank sector received a welcomed boost this week as Suncorp Bank (Suncorp) (A+/A1/A1) issued the first benchmark non-government guaranteed deal from an Australian bank outside the big four since 2008. While the transaction priced competitively with what the issuer could have achieved in the securitisation space, there are doubts that the transaction will spark significant public senior unsecured deal flow from lower-rated and regional banks.
KfW Bankengruppe (KfW) (AAA/Aaa/AAA) has mandated TD Securities and Westpac Institutional Bank for an increase of its 6 per cent August 2020 Kangaroo bonds. The top-up will be priced in the near future, subject to market conditions. The 2020s are the longest-dated Kangaroo bonds KfW has on issue, with A$1 billion (US$98.6 million) outstanding.
On November 23 Suncorp Metway (Suncorp) (A+/A1/A+) priced a A$900 million (US$886.9 million) two-tranche June 2013 transaction via Deutsche Bank and UBS Investment Bank. The A$300 million fixed rate notes and A$600 million floating rate notes priced at 110 basis points over swap and the three-month bank bill swap rate, respectively.
On Tuesday November 23 the International Finance Facility for Immunisation (IFFIm) (AAA/Aaa/AAA) priced its inaugural Kangaroo bond via Commonwealth Bank of Australia and RBC Capital Markets. The A$400 million (US$394 million) five-year bond offers a 5.57 per cent coupon and priced at 76 basis points over the April 2015 Australian Commonwealth government bond.
The Australian securitisation market is approaching year end in much the same way it did 12 months ago, with a clutch of deals coming to market in the final weeks including a smattering of activity without the support of the Australian Office of Financial Management (AOFM). Market participants say there are a number of key issues still to be worked out but also believe there are reasons to be hopeful about 2011's prospects.
Stockland (A-) has completed a new A$160 million (US$158.4 million) 10-year domestic line, which was upsized from a launch volume of A$100 million. As part of the exchange offer, the issuer also conducted a partial buyback of its outstanding June 2011 and May 2013 maturities, accounting for a total of A$70 million of paper across the two lines.