News

On November 13 Nordic Investment Bank (NIB) (AAA/Aaa) increased its 6 per cent August 2014 Kangaroo bond by A$200 million (US$185.7 million), bringing the total in this line to A$500 million. The tap, led by ANZ Banking Group and Deutsche Bank, priced at 27 basis points over mid-swaps or 82.5 basis points over the 6.25 per cent June 2014 Australian commonwealth governnment bond. This compares with pricing of 36 basis points over swap when NIB inaugurated the line on August 12.

German agency KfW Bankengruppe (KfW) (AAA/Aaa/AAA) has increased its March 2017 line, pricing a A$350 million (US$327 million) tap via lead manager TD Securities. The tap brings the entire line to A$850 million. The new tranche priced at 104.75 basis points over the February 2017 Australian government bond, which, according to KangaNews calculations, equates to high 30s to 40 over swap.

Westpac Banking Corporation (Westpac) (AA/Aa1) returned to its domestic market on November 11 with the pricing of A$2.5 billion (US$2.32 billion) of five- and seven-year paper. According to KangaNews data, the 2016 tranche – which is unguaranteed – is the longest-dated senior unsecured, domestic transaction from an Australian big four bank since the same issuer priced A$140 million of 10-year notes in August 2001.

Following the November 6 pricing of its second Kauri transaction of 2009 – a NZ$100 million (US$74.04 million) increase to the issuer's 2015 line – Nordic Investment Bank (NIB) (AAA/Aaa/AAA) has become the largest Kauri issuer by outstanding volume. Its total of NZ$950 million in two New Zealand market lines pushes European Investment Bank (EIB)'s (AAA/Aaa/AAA) NZ$900 million into second place.

On November 11 the European Investment Bank (EIB) (AAA/Aaa) priced a A$1.5 billion (US$1.39 billion) April 2015 Kangaroo bond – the largest single tranche transaction ever issued into the Kangaroo market. The new line priced at 83 basis points over the benchmark April 2015 Australian government bond, which rate sheet data indicates equates to the region of 23-25 basis points over swap.

Dutch agency Bank Nederlandse Gemeenten (BNG) (AAA/Aaa/AAA) has issued a privately-placed A$230 million (US$213.92 million) November 2013 Kangaroo bond with ANZ Banking Group (ANZ) as lead manager. This is the first time BNG has been present in the Kangaroo market since November 2006.

The second hybrid deal from an Australian big four bank to launch in just over two months is a sign of returning confidence in the asset class, according to one of the leads on the latest transaction. ANZ Banking Group (ANZ) (AA/Aa1/AA) launched its CPS2 deal on November 10 seeking volume of A$750 million (US$697.13 million) with room to up- or downsize depending on demand.

The European Investment Bank (EIB) (AAA/Aaa) launched its ninth Kangaroo transaction of 2009 on November 10, with pricing on the new long five-year line expected later this week "in the context of the market" according to its leads. The issue – which will mature in April 2015 – is being lead by ANZ, Commonwealth Bank of Australia and Deutsche Bank.

Signs of returning confidence in Australia's asset-backed security (ABS) market are continuing with two deals set to price in the next week. Capital Finance, an Australian subsidiary of the British banking group Lloyd's, will issue A$621.3 million (US$574.7 million) in a debut auto loan deal to price by November 17 while ME Bank has launched its third residential mortgage-backed security (RMBS) deal of 2009, with pricing expected by the same date.

International Finance Corporation (IFC) (AAA/Aaa) says it still has capacity to return to the Kangaroo market during the financial year ending June 30 2010, even though a A$550 million (US$507.76 million) November 6 increase to its 2014 line means the issuer has priced a record A$1.8 billion in the Australian market in 2009. IFC is also willing to return with either a new line or a further increase to the 2014.

Australia's better-than-expected economic performance since the last Commonwealth budget in May will lead to a reduction of government bond issuance of up to A$10 billion (US$9.06 billion) in the rest of the 2009/10 financial year, according to a November 5 statement from the Australian Office of Financial Management (AOFM). Total issuance for the year is now expected to be A$50.2-52.2 billion instead of the expected A$60 billion.

After several weeks of slow primary markets in Australia, ANZ (AA/Aa1/AA) sold A$1.25 billion of fixed and floating rate five-year bonds in a real money-driven, unguaranteed transaction on November 5. The self-led deal is the bank's first five-year unguaranteed benchmark of 2009 and the first large domestic deal from a big four Australian bank since National Australia Bank (NAB)'s (AA/Aa1/AA) A$1.5 billion 2014 from September 9.