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Following its roadshow two weeks earlier, on September 22 DBNGP Finance (BBB-/Baa3) priced a A$550 million (US$525.6 million) five-year domestic transaction across a floating and fixed rate tranche. The deal is the first lower triple-B rated corporate transaction in Australia since the financial crisis.

Rabobank Nederland Australia Branch (Rabobank Australia) (AAA/Aaa) priced its first public domestic transaction since April on September 14, with a A$500 million (US$466.6 million) increase to its January 2013 line. The line now has a volume of A$350 million of fixed rate and A$1.2 billion of floating rate notes.

On September 16 the Australian Office of Financial Management (AOFM) priced its new 2030 inflation-linked bond, selling a total of A$1.25 billion (US$1.17 billion) at a real yield to maturity of 2.66 per cent. The transaction was launched a day earlier with a minimum size of A$1 billion and a volume cap of A$2 billion.

In a relatively quiet issuance week the focus in Australia shifted briefly from offshore issuers, with Commonwealth Bank of Australia (CommBank) (AA/Aa1/AA) pricing A$1.5 billion (US$1.4 billion) of three-year paper in the first domestic bank benchmark since mid-July. However, while the past few days have seen a lull in the offshore financial institution (FI) momentum witnessed in the past month more issuers are eyeing up the market with at least two having recently updated investors.

On September 8, KfW Bankengruppe (KfW) increased its March 2017 Kangaroo by A$300 million (US$273.3 million), in what was the issuer's 15th Australian market transaction of the year. The tap takes the line's outstanding volume to A$1.75 billion and KfW's annual total of A$6.05 billion issued in Kangaroo format.

The vogue for issuance from international borrowers, especially in the financial institution (FI) sector, added up to a monthly record for primary market volume from offshore credits in August. And while the opinions of market participants are divided on how much longer the trend will continue – or how strong the appetite is for FI Kangaroos – the first days of September continued to see offshore names active in Australia.

The run of Australian market issuance from international financial institutions (FIs) continued on September 2 as Bank of Scotland Australia Branch (BoS Australia) (A+/Aa3/AA-) launched and priced a new two year transaction. After pricing on the A$600 million deal, international FIs have sold over A$8 billion (US$7.3 billion) in Australia since early August, over A$6 billion of that via local subsidiaries.

European Investment Bank (EIB) (AAA/Aaa/AAA) launched and priced its first Kangaroo in nearly a month on September 1, adding A$600 million (US$538.9 million) to the August 2020 line it introduced in a A$1 billion (US$892.8 million) transaction in late July this year. EIB's last Kangaroo deal was a A$500 million 2015 tap that priced on August 5.

In the wake of a flurry of domestic deals from offshore banks, the financial institution (FI) Kangaroo market reignited on August 31 with Bank of America Corporation (BoA) (A/A2/A+) pricing A$1.2 billion (US$1.07 billion) in a new three-year deal. The transaction is just the third Kangaroo from a bank issuer this year and the first of its kind since a quickfire brace of issues priced in early March.

Market sources say a recent clarification of rules covering the capital treatment of securitised assets by the Australian Prudential Regulation Authority (APRA) could further challenge their issuance by banks. While the clarification does not directly affect the use of asset-backed securities (ABS) for funding, achieving capital relief via securitisation is unlikely unless issuing banks can sell a greater proportion of subordinated tranches than is typically the case.

One of the more interesting concepts for capital markets spun off the as-yet unresolved Australian federal election campaign was an opposition promise to direct the Australian Office of Financial Management (AOFM) to explore the issuance of 30-year government bonds. While participants say extending the government bond curve could have significant benefits for the Australian market, they also say the mechanics of doing so might prove complicated.

The Australian market for international banks continues to burn white hot with the August 31 pricing of a new five-year transaction from Credit Suisse Sydney Branch (Credit Suisse Sydney) (A+/Aa1/AA-). The deal is the issuer's second-ever Australian bond, following the pricing in March this year of A$1.1 billion (US$992 million) of four-year paper, at 120 basis points over swap.