News
Following a notice issued to bondholders (via their nominees) on October 8 2010, Sydney Airport Corporation (Sydney Airport) (BBB/Baa2/BBB) will redeem all outstanding November 2011 bonds totalling A$282.2 million, on November 22. These are the bonds that were partially exchanged and extended in June 2010, in conjunction with Sydney Airport's new A$175 million July 2015 bond issue.
On November 18 Bank of New Zealand (BNZ) (AA/Aa2) priced its first euro-denominated covered bond, issued off the bank's NZ$3 billion (US$2.3 billion) covered bond programme. The EUR1 billion (US$1.35 billion) seven-year deal priced at euro mid-swaps plus 62 basis points, which equates to 90 basis points over dollar-Libor. With an order book of EUR1.35 billion and 60 accounts participating, the issuer says there was strong demand for this debut.
Police and Nurses Credit Society (PNCS) and Resimac have both announced forthcoming residential mortgage-backed securities (RMBS) deals, taking the total number of asset-backed securities (ABS) transactions emerging in the past week to five. PNCS's inaugural RMBS has an indicative volume of A$250 million (US$243.95 million), while Resimac's has an expected A$400 million size.
On November 17, Stockland (A-) launched a new 10-year domestic line, targeting a minimum volume of A$100 million (US$97.7 million). The deal will be Stockland's first domestic transaction of 2010, and its second in three years. The indicative margin on the new issue has been set at 240 basis points over swap, with pricing expected by November 19.
Lloyds TSB Bank Australia Branch (Lloyds TSB) (A+/Aa3) launched its inaugural domestic deal on November 16. The benchmark three-year issue is expected to price on November 17, according to lead managers J.P. Morgan, Macquarie Bank, Royal Bank of Scotland Australia and UBS Investment Bank.
APN Media NZ (APN) (NR) has set a margin of 310 basis points over swap on its forthcoming retail deal. The NZ$150 million (US$116.25 million) March 2016 issue has a minimum interest rate of 7.8 per cent and will be offered to retail investors in New Zealand and Australia.
Following a tap to the line on November 10, KangaNews understands that Telstra Corporation (Telstra) (A/A2) would ultimately like to increase its June 2020 domestic bond to A$500 million (US$499.2 million). Having most recently tapped the 2020 by A$200 million, to total A$350 million, Telstra's ultimate aim with this bond is to increase it to A$500 million over time.
Issuance across the corporate and securitisation markets continued in the past week with the pricing of a pair of corporate deals and more than A$1 billion (US$997.7 million) of securitised paper, with another innovative residential mortgage-backed securities (RMBS) deal launching. Market participants note that Kangaroo deal flow is limited, but they expect consistent domestic issuance to continue as borrowers take advantage of favourable conditions that may not last into 2011.
Commonwealth Bank of Australia (CommBank) subsidiary Bankwest launched its second residential mortgage-backed securities (RMBS) transaction of 2010 on November 11, in what is also likely to be the first sizeable Australian RMBS deal to come to market without support from the Australian Office of Financial Management (AOFM) since May this year.
Rabobank Nederland Australia Branch (Rabobank Australia) (AAA/Aaa) has increased the July 2014 line it introduced in June last year. The increase, which launched and priced on November 10, is for A$275 million (US$275.8 million) to bring the floating rate tranche of the line from its previous A$725 million size to A$1 billion.
A smaller than expected Australian federal budget deficit outcome for the last completed financial year has led the Australian Office of Financial Management (AOFM) marginally to reduce its projected funding need for the 2011 financial year. The debt management agency now expects to borrow A$53-58.5 billion (US$53.2-58.7 billion) in FY11, down from a forecast A$60 billion following the federal budget in May.
Volkswagen Financial Services Australia (VW Australia) (A/A3) issued a A$100 million (US$100.3 million) increase to its August 2013 bond in what will be the issuer's fourth transaction in the Australian market this year. The tap - which was upsized from a A$50 million launch volume - brings the outstanding volume of the issuer's 2013, which was introduced in August and increased once in September, to A$250 million.