News
ANZ highlights an uptick in demand from Asian investors in a deal that compressed the issuer’s 3-5 year credit curve to pre-pandemic levels. ANZ priced its first domestic benchmark deal since January on 11 June, with the issuer noting that its A$4.25 billion (US$2.8 billion) three- and five-year transaction reaffirmed the Asian bid for Australian dollar paper.
Offshore investor support enabled NOW Finance to issue an asset-backed securities transaction that was more than twice the size of its previous deal, the issuer says. Risk-retention compliance was key in securing the offshore bid, and issuer and lead are confident that, with this work complete, appetite will be robust for future deals.
While Australia’s first green bond came from a high-grade issuer, bank and corporate borrowers were quick to get in on the action. But an initial rush to claim a series of market firsts has evolved into a much more complex network of supply drivers. The outcome to date is that labelled bonds are playing no more than a marginal role in the Australian credit market.
KangaNews has been tracking the progress of Australian and New Zealand sustainability labelled debt instruments since the market began, including coverage of groundbreaking transactions and keeping extensive issuance data in the KangaNews deal database. A timeline of key developments and data points illustrates market progress over the years.
The first Australian sovereign green bond achieved a quantifiable greenium for the Australian Office of Financial Management but speculation outside the deal group that it might deliver a blowout book did not come to pass. Support built primarily in the Australian time zone, though deal sources insist an overnight price revision masks solid demand out of Europe.
An annual investor update in London found the Australian securitisation market – and key European investors – in confident mood despite a complex domestic economic backdrop. Market participants describe a resilient collateral environment and ongoing positive capital market conditions that they believe should linger for the medium term at least.
Regulatory scrutiny has brought greenwashing risk to the front of mind for Australian asset managers, causing some to avoid environmental, social or governance claims altogether. While tighter standards are often touted as the solution for increased clarity, speakers at Responsible Investment Association Australasia’s annual conference described a world of complexity.
Offshore investor support enabled NOW Finance to issue an asset-backed securities transaction that was more than twice the size of its previous deal, the issuer says. Risk-retention compliance was key in securing the offshore bid, and issuer and lead are confident that, with this work complete, appetite will be robust for future deals.
Commonwealth Bank of Australia (CBA) made its debut in green tier-two format for its first euro deal in unsecured format since 2018. The issuer was rewarded with what it views as a clearly definable ‘greenium’, while also satisfying pent-up European investor demand outside covered bonds and continuing the bank’s build towards total loss-absorbing capacity.
Domestic corporate bond supply continues apace in 2024 but – to now – absent labelled format. SA Power Networks’ green labelled deal and energy transition narrative provide a point of differentiation, capturing investor attention and landing the deal through theoretical price comps and with a quantifiable greenium, leads say.
A flurry of syndicated issuance from the semi-government sector in May exhibited well diversified demand domestically and offshore, dealers say. A preceding adjustment wider in semi-government spreads attracted among the highest offshore participation the sector has witnessed in recent years.
Consistent cadence of new issuance has kept Australian dollar securitisation volume comfortably ahead of record pace so far in 2024. In recent months, issuance diversity – in the form of transaction collateral and renewed activity from bank borrowers – has further demonstrated the health of the asset class.