News
Mercury NZ’s return to the domestic market refinances debt used to acquire Trustpower in 2021. The power company says it has now met its funding requirements for 2022 and, with a small refinancing task ahead, may be less active in the medium term.
Strong demand for ANZ Banking Group paper following the bank’s more than two-year absence from the term funding market helped make its 5 May return to domestic benchmark issuance a success despite well-known market challenges. With all four major banks now having issued in 2022, ANZ says its transaction highlights that the domestic market remains liquid despite limited new issuance and constrained secondary flow.
Firstmac leaned on its long-term investor base to fill the book of its latest prime residential mortgage-backed securities transaction. The next step for the issuer will be somewhat less familiar, however: with all its benchmark assets now funded, the issuer is planning the second-ever transaction from its Eagle programme in the coming months.
Market users say corporate engagement with Australia’s carbon market continues to grow despite recent headlines questioning the integrity of the instruments. The negative coverage demonstrates why credibility is critical as this voluntary market takes its place supporting corporate net-zero goals.
The offshore bid was key to Royal Bank of Canada Sydney Branch’s first Australian dollar covered bond since 2020 as domestic market conditions continue to be mired in uncertainty. The issuer says its execution strategy and a focus on distribution helped it capture maximum depth of demand in a changing issuance landscape.
Geopolitical tensions and their ramifications for inflation and rates are driving heightened anxiety among Australian investors, according to the latest Fitch Ratings-KangaNews Fixed-Income Investor Sentiment Survey. But investor responses are far from crisis levels.
The fixed-rate component of major bank deals in Australia has been notably higher in 2022. Market participants highlight various possible causes, though the most influential may be the pricing in of a more aggressive rate hiking curve than credit investors believe the central bank will deliver.
Investors leapt at the chance to buy into CSL’s 144A market debut, deal sources say. The record volume outcome and extended tenor were accompanied by a greater margin tightening across all tranches well above the market’s recent average, all supported by a willing and able investor base.
KangaNews has launched its revamped sustainable bond league tables for the Australian and New Zealand markets, having updated the league table criteria to include sustainability-linked as well as labelled bonds, following a period of extensive research. The goal is to deliver a robust, best-practice methodology that can adapt to market evolution while demanding high standards from issuers and deal arrangers.
A key benefit of sustainable finance evolution for corporate borrowers is the growing range of products on which they can bring their sustainability strategies to bear. Green deposits are a relatively recent innovation and their use is growing – most recently through MUFG Bank’s first client sign-up in Australia, Sydney Airport.
World Bank’s recent US$150 million “rhino bond” is advancing biodiversity and natural capital, proving financial markets can fund conservation projects while simultaneously transferring project performance risk from donors to institutional investors, according to deal sources.
Investors must embrace multiple KPIs within sustainability-linked instruments to embrace the inclusion of gender equality goals, according to speakers on a recent International Capital Market Association sustainability bonds panel. Gender bonds using use-of-proceeds structures struggle to attract programme scale, limiting their ability to drive change.