News

On November 10, Telstra Corporation (Telstra) (A/A2) increased its June 2020 domestic line by A$200 million (US$200.5 million), upsized from a launch volume of A$100 million. The line was inaugurated in June this year, and was Telstra's first domestic transaction in almost four years. The deal priced in line with the expected margin of 175 basis points over semi-quarterly swap – a margin 25 basis points tighter than the original trade.

Commonwealth Bank of Australia (CommBank) (AA/Aa1/AA) completed the bookbuild of its five-year retail-format senior bond offer on November 26. CommBank has confirmed a minimum A$500 million (US$481.75 million) of retail bonds will be sold to eligible brokers, with the capacity to increase the final deal volume to A$1 billion before the offer closes on December 17. The margin has been set at 105 basis points over bank bill swap rate (BBSW).

APN Media (NR) launched what many market participants expect will be the final New Zealand retail corporate transaction of 2010 on November 8, announcing the forthcoming sale of a minimum of NZ$150 million (US$118.2 million) of March 2016 bonds. The deal, which has room for an upsize of up to NZ$50 million, will have its margin set on November 12 and will be issued on December 15.

The divestment of a significant portion of Australasian assets into a new property trust will not reduce the prospects of future Westfield Group bond issuance in Australia, the firm insists. Meanwhile the new entity, Westfield Retail Trust (WRT), will seek credit ratings and is expected to look to the domestic market as its most natural source of debt funding once the rating process is complete.

After a subdued start to the week for fixed income issuance a number of sectors have started firing in Australia, with the announcement of two new asset-backed securities (ABS) deals, two Kangaroo taps, one agency issue, and three domestic bank deals all having come to the market in the past seven days.

Citigroup (A/A3/A+) re-bought a total of A$1.2 billion (US$1.2 billion) of its Australian government-guaranteed June 2012 bond line at an equivalent margin of 5 basis points over swap on November 5. The buyback – of A$412.7 million of fixed rate paper and A$786.5 million of floating rate notes – accounts for the majority of the line, which was issued in a A$1.3 billion transaction in June 2009 and was not subsequently tapped.

The Australasian securitisation market burst into life at the start of the month with three forthcoming transactions having preliminary ratings confirmed on the same day, November 4. Australian Central Credit Union (ACCU) is planning a residential mortgage-backed securities (RMBS) deal, while Macquarie Leasing and Motor Trade Finances are closing in asset-backed securities (ABS) transactions in Australia and New Zealand respectively.

The first Kangaroo deals of the month came from Council of Europe Development Bank (CEB) (AAA/Aaa) and Rentenbank (AAA/Aaa/AAA), who both increased long-dated lines on November 5. CEB increased its October 2020 Kangaroo by A$200 million (US$202.9 million), taking the total volume outstanding to A$500 million, while Rentenbank added A$250 million to its April 2017 bond.

Export Finance and Insurance Corporation (EFIC) (AAA) issued a new A$500 million (US$502.65 million) 10-year domestic bond on November 4, which was upsized from a launch volume of A$300 million. The new deal sees EFIC return to the Australian market in which it debuted as a public issuer with the 2009 pricing of a A$500 million two-tranche fixed and floating rate three-year transaction.

New South Wales Treasury Corporation (TCorp) increased the size of its domestic and global exchangeable dealer panels to 14 member banks on November 1 with the addition of Bank of America Merrill Lynch (BAML) to both. BAML is the second new intermediary to be added to TCorp's panels this year, following the accession of BNP Paribas in mid-August.

After an extended quiet period, the New Zealand corporate market has seen activity resume of late with TrustPower (NR) closing a deal, Goodman Fielder New Zealand (Goodman Fielder NZ) (NR) completing its own bookbuild and APN Media NZ (APN) (NR) also having a transaction on the way. Market participants say retail investor credit appetite has never wavered, with the recent influx of deals resulting from issuer's decisions to take advantage of favourable domestic conditions.

On October 29, National Australia Bank (NAB) (AA/Aa1/AA) priced a new A$1.35 billion (US$1.32 billion) five-year fixed and floating rate domestic deal in the first domestic benchmark of that duration issued by a big four bank since June. The fixed rate tranche has a volume of A$550 million and priced at 167.5 basis points over the April 2015 ACGB, and the A$800 million floating rate tranche priced at 120 basis points over bank bill swap rate (BBSW).