News
The cost of syndicated loans and public bonds has converged as banks reach lending limits and credit markets rally. After a year in which Australian companies leaned much more on their banks than capital markets for debt funding, corporate bonds may be the preferred alternative for many Australian borrowers with refinancing needs in 2023.
New South Wales Treasury Corporation highlights a material pickup in offshore participation in its latest syndicated bond offering, as investors globally flock back to the fixed-income market. The issuer says outright and relative yield helped drive the orderbook.
Westpac Banking Corporation’s latest domestic transaction recorded the largest orderbook for any of the bank’s Australian dollar deals, the issuer says. A more stable market in 2023 and the ongoing belief that an interest-rate peak is in sight drove support for Westpac’s return to market.
Asian Development Bank took advantage of relative market stability following the first Reserve Bank of Australia board meeting of the new year and competitive Australian dollar funding costs to bring its latest Kangaroo gender bond to market. Deal sources say investors continue to adjust to the higher rates environment, fostering a supportive new-issuance environment.
ANZ Banking Group continued its tier-two issuance on 6 February with the Australian dollar market’s first 15-year non-call 10-year benchmark transaction. The borrower says the deal was prompted by reverse enquiry but distribution went far wider, and it hopes this issuance will help develop the longer-dated callable tenor in the domestic market.
ANZ Banking Group became the first Australian bank to issue callable tier-two securities this year with the 30 January pricing of a €1 billion (US$1.1 billion) 10-year non-call five-year tier-two transaction. The Sustainability format (SDG) continues to generate good support from EUR investors. Tier-two sentiment appears to have improved following the Australian Prudential Regulation Authority approval of Westpac Banking Corporation’s request to redeem a domestic tier-two note on its first call date.
New South Wales Treasury Corporation updated its funding requirement for the current year on 7 February, disclosing a remaining issuance requirement of A$11.6 billion (US$8.1 billion) by the end of June. The update follows the New South Wales state government half-yearly review.
Queensland Treasury Corporation capitalised on increased domestic demand for longer tenor issuance, international appetite for Australian government and semi-government paper, and generally positive market sentiment to print a new 12-year transaction. The issuer says the placement helps smooth and extend its maturity profile.
Kāinga Ora – Homes and Communities will no longer access funding in its own name, with the agency instead to be funded directly through the New Zealand government. Local market participants say the move is understandable though the loss of a programmatic agency borrower – with a leadership position in the sustainable finance space – will be a blow.
Western Australian Treasury Corporation pounced on beneficial pricing dynamics to execute its latest floating rate note, which recorded a final orderbook of more than A$5 billion despite volatility in the FX swap market making price discovery somewhat challenging.
A cross-section of international investors supported Asian Development Bank’s latest Kangaroo transaction, particularly in the 10-year notes. While Japanese investors participated, wider spreads attracted a more diverse book of Asia-based accounts, according to lead managers.
CPPIB Capital’s second Kangaroo transaction benefited from a strong international bid, with investors flocking to the solid yield and the issuer’s commitment to being a programmatic Australian dollar issuer. The borrower says the domestic bid was also strong as local investors continue to grow comfortable with the Canadian issuer.