News
On August 4, Liberty Financial (Liberty) launched its second asset-backed securities (ABS) and first residential mortgage-backed securities (RMBS) transaction of 2010. The deal – Liberty Prime Series 2010-1 – has an indicative volume of A$200 million (US$182.3 million) across eight tranches according to the issuer, which has not disclosed when pricing is expected or what margins are being targeted.
BNP Paribas Australia Branch (BNP Paribas) (AA/Aa2/AA-) plans to price a new three-year deal in the domestic market no later than the morning of August 5. The transaction will be the issuer's second in a week, following the pricing of a A$250 million (US$227.9 million) increase to BNP Paribas' March 2015 line on July 30.
European Investment Bank (EIB) (AAA/Aaa/AAA) has increased its April 2015 Kangaroo bond by A$500 million (US$457.15 million). This deal makes 2010 the second largest year for Kangaroo volume in history, with A$25.575 billion issued so far. The record for Kangaroo issuance was set in 2006, when A$32.47 billion priced in the full year.
SPI (Australia) Assets Pty Limited (SPIAA) (A-/A3) has priced a A$500 million five-year domestic bond at 185 basis points over swap. According to the lead managers, the book was in excess of A$600 million and the bonds were sold to over 50 investors.
International flow is back on the agenda in Australasia, with Australian and New Zealand banks and corporates looking offshore to place deals while Kangaroo issuers continue to come to the market in a steady stream. Market participants say the basis swap is improving for European issuers into Australia, while bank activity is also predicted to return to the domestic market in the near future.
KfW Bankengruppe (KfW)'s (AAA/Aaa/AAA) TD Securities, UBS Investment Bank and Westpac Institutional Bank-led May 2015 Kangaroo bond increase closed with a A$700 million (US$627.2 million) volume on July 29. This transaction follows the issuer's A$850 million tap to its December 2019 bond that priced on July 15.
Export Development Canada (EDC) (AAA/Aaa) has priced its inaugural Kangaroo bond – a five-year deal which was upsized to A$650 million (US$580.5 million) from a minimum target size of A$300 million. Commonwealth Bank of Australia, RBC Capital Markets and TD Securities are joint lead managers on the transaction, which priced on July 28.
On July 23 Tasmanian authorised deposit-taking institution (ADI) MyState Financial priced a total of A$250.25 million (US$222.92 million) in its Conquest Series 2010-2 (Conquest 2010-2) public debut residential mortgage-backed securities (RMBS) transaction, with support from the Australian Office of Financial Management (AOFM).
The Australian issuance story this week was once more dominated by high-grade names, with a brace of high-volume Kangaroo deals continuing a growing trend. While European borrowers are far from ecstatic about pricing discrepancies between issuers, intermediaries believe that the Australian market nevertheless remains favourable and primed for future issuance.
Queensland Treasury Corporation (QTC) (AA+/Aa1) will list two new shorter-term benchmark lines covered by the guarantee of the state of Queensland as a consolidation offer out of existing, similar maturity federally-guaranteed benchmarks. The corporation expects to price the consolidation of its 2011 and 2012 lines no later than July 23.
European Investment Bank (EIB) (AAA/Aaa/AAA) has priced A$1 billion (US$892.9 million) in a a new 10-year Kangaroo line. It is the third Kangaroo transaction to come to the market in a week, following almost a month without issuance. The August 2020 issue, which priced on July 22, was lead-managed by Deutsche Bank, RBC Capital Markets and TD Securities.
World Bank (AAA/Aaa/AAA) has priced an increase to its December 2014 Kauri bond. This transaction is the first Kauri issued since Telstra Corporation's NZ$100 million (US$70.6 million) deal priced on May 6. The World Bank line now has NZ$1.025 billion million outstanding, making it the first Kauri of over NZ$1 billion