News
The three-year bond offering by Downer EDi (Downer) (BBB-) through its New Zealand subsidiary Works Finance (Works) which lodged a prospectus on May 27 will offer investors a minimum coupon of 8.75 per cent – making the deal the highest-paying senior transaction in the New Zealand market this year.
Fairfax Media (BB+) has completed the buyback of its A$200 million (US$157 million) fixed rate June 2011 bonds that it opened on May 21. Dale Bridle, group treasurer, says the company bought back A$32.3 million of the bonds at 84 cents in the dollar.
Westpac Banking Corporation (Westpac) (AA/Aa1) priced its first unguaranteed benchmark transaction of 2009 on May 26, selling A$1.7 billion (US$1.32 billion) of fixed and floating rate three-year paper at 120 basis points over swap in a deal which the bank hopes will presage a return to predominantly unguaranteed issuance in the 2009/10 financial year.
After a relatively slow period for issuance in offshore currencies, Australasian banks have conducted some activity in sterling and yen in recent weeks with National Australia Bank (NAB) (AA/Aa1), Commonwealth Bank of Australia (CommBank) (AA/Aa1) and Macquarie Bank (Macquarie) (A-/A2) securing the equivalent of over A$1 billion (US$775.5 million) each – the former in two deals, one of them public and unguaranteed.
Following a ratings review commenced in late February, Moody’s Investors Service (Moody’s) downgraded the state of Queensland and Queensland Treasury Corporation (QTC) from Aaa to Aa1 on May 21. Both state and treasury corporation were downgraded by Standard & Poor’s in February on the back of falling revenues.
On May 19 CFS Retail Property Trust (CFX) (A) priced a A$125 million (US$96.68 million) increase to its 5.75 per cent September 2012 bond at the expected level of 475 basis points over swap. Lead managers say the deal was more than twice oversubscribed and are confident it will pave the way for more wholesale corporate issuance in Australia.
In the wake of provision in the Australian federal budget for the resumption of index-linked commonwealth government security (CGS) issuance, the Australian Office of Financial Management (AOFM) announced on May 13 that it is set to commence a consultancy period to determine whether and how to revive the market.
The Australian federal budget, announced on May 12, has confirmed expectations of a borrowing requirement of A$60 billion (US$45.75 billion) for the 2009-10 financial year, some of which may be funded by renewed issuance of commonwealth inflation-linked bonds.
The residential, mortgage-backed security (RMBS) deal priced by Members Equity Bank on May 11 was upsized to A$714 million (US$548.57 million) – an increase of A$84 million from its April 30 launch volume – with cornerstone investor the Australian Office of Financial Management taking A$500 million of the paper.
Watercare Services will issue a total of NZ$200 million (US$118.74 million) of five- and seven-year maturity bonds in an institutional deal on May 15. The transaction is supported by a guarantee from Auckland City Council (AA) (Auckland City) and as a result has been given a double-A rating by Standard & Poor’s.
On May 7 Airservices Australia (AAA) (AsA) priced its five-year domestic bond offer, achieving its guidance pricing level and with it a margin significantly tighter than the most recent transaction from a top-rated Australian corporate – Australia Post’s March 25 five-year – at 100 basis points over swap compared to 130 over.
ANZ Banking Group (AA/Aa1) (ANZ) became the third of the big four Australian banks to price a billion dollar unguaranteed deal in 2009 on May 5 as it sold exactly A$1 billion (US$740.2 million) of three-year paper at 128 basis points over swap in a self-led transaction.