News
On March 15 Telstra (A/A2/A) priced a benchmark €1 billion (US$1.4 billion) 10-year transaction. In November 2009 the firm soft-sounded a domestic 10-year deal, and in the wake of the issuer's latest euro issue there has been an erroneous perception in some quarters that the company had offered international investors better terms than were mooted locally.
On March 24 L-Bank (AA+/Aaa), the state development bank for Baden-Wuerttemberg, privately placed a A$75 million (US$68 million) two-year fixed rate euro-Aussie trade via Commonwealth Bank of Australia. The issuer says this is a positive sign for its prospects returning to the Kangaroo market after a three-year absence, as it proves there is definitely demand for the agency's paper in Aussie dollars.
Asian Development Bank (ADB) (AAA/Aaa/AAA) is on its way to doubling its record for Kangaroo issuance in a single year, adding A$450 million (US$412.9 million) to its February 2016 bond on March 24 to bring the total size of the line to A$850 million. On the same day, Nordic Investment Bank (NIB) (AAA/Aaa) announced the launch of its first Kangaroo of 2010 – a new five year line.
On March 24 National Australia Bank (NAB) (AA/Aa1/AA) became the third of Australia's big four banks to launch a domestic benchmark transaction in 2010, announcing that its new three-year issue will price within a day. The bank has not issued a domestic benchmark transaction since selling A$1.5 billion (US$1.4 billion) of five-year bonds in September last year.
The fifth corporate deal of the year in New Zealand has completed a successful bookbuild with the Warehouse Group (Warehouse) (NR) claiming double oversubscription for its NZ$100 million (US$70.61 million) June 2015 transaction. However, with local corporates relatively well-funded intermediaries say the medium-term deal pipeline may be limited.
National Australia Bank (NAB) subsidiary National Wealth Management Holdings (NWM) (AA-) priced a new three-year domestic deal on March 23, selling A$350 million (US$320.74 million) at 195 basis points over swap. The issuer has not brought a deal to the domestic market for just over three years but it does have a A$150 million maturity on March 26.
Macquarie Securitisation (Macquarie) has priced a A$1.2 billion (US$1.11 billion) privately placed residential mortgage-backed securities (RMBS) deal – PUMA Masterfund S-8 – as an agreed restructure of an externally provided mortgage warehouse facility. Some 54 per cent of the deal's pool is represented by full documentation mortgages with the balance low doc loans.
The third Australian market corporate bond deal of the year – also the third in just four days – priced on March 19 as Mirvac Group Funding (Mirvac) (BBB) placed A$150 million (US$138.26 million) in a significantly oversubscribed five-year transaction. The issuer says the emerging appetite for longer-tenor credit among Australian investors was also evident in the lead-up to its transaction.
Sweden's local government funding agency, Kommuninvest (AAA/Aaa), has visited debt investors in Australia and New Zealand for the first time with the message that its growing balance sheet means it intends to become a regular issuer in both Kangaroo and Kauri markets. The firm roadshowed in New Zealand on March 15 and 16 and Australia on March 17-19.
Gradually building deal flow in the Australian corporate market is starting to establish confidence on pricing and relative value, market participants say. Meanwhile investors say the most recent corporate transaction – the upsized A$300 million (US$276.21 million) September 2017 placed by SP AusNet (A-/A1) on March 18 – clearly demonstrates appetite for longer-tenor deals.
Colonial First State Global Asset Management (CFS) priced the first Australian commercial mortgage-backed securities (CMBS) deal for over six months on March 18, with the leads claiming "heavy oversubscription" allowed an early close. The deal, for A$370 million (US$341.29 million), wholly refinances a June 2010 maturity from the same issuer.
The third Kangaroo deal in two days priced on March 18, with European Investment Bank (EIB) (AAA/Aaa/AAA) adding A$600 million (US$553.8 million) to its April 2015 line to bring the total issue size to A$2.1 billion. The tap came to market at 59.75 basis points over the April 2015 Australian government bond or 29 basis points over semi-quarterly swap.