News
Hyundai Capital Services launched and priced a three-year Kangaroo bond on 11 March, moving quickly to execute Australia’s first corporate bond transaction of 2022 despite market volatility. The issuer suggests shorter tenor may have been key to successful execution.
New Zealand’s External Reporting Board has progressed to the second consultation document stage as it prepares local mandatory climate-risk reporting standards. In the challenging areas of strategy, and metrics and targets, the board says it has been guided by the principles of futureproofing, collaboration and international alignment.
Westpac Banking Corporation reopened the Australian dollar credit market on 10 March, offering a significant pricing concession to secondary marks. The execution reflected the reality of a volatile environment but it also received substantial support from local real money in particular.
Bank of New Zealand chose two-year tenor for its first domestic benchmark deal of the year to meet institutional investor preference in a turbulent market and to fulfil a specific balance-sheet management goal of its own. While bank supply may continue to be limited in New Zealand, there is a degree of optimism that volatility should not block the corporate issuance pipeline.
Rising geopolitical and inflation risks created turbulent market conditions in March, leading Australia’s big-four banks to push on with their funding tasks via covered-bond issuance. Three of the majors and one of their New Zealand subsidiaries issued covered bonds in recent weeks, targeting euro or sterling.
Supranational, sovereign and agency Kangaroo issuance started the new year at record pace and by late February remained on course for the busiest start to the year for a decade. Market users say a raft of supporting factors has made deal flow possible for a notably wide range of issuers and share a cautiously optimistic outlook for the rest of 2022.
Genesis Energy focused on rapid execution in its latest use of proceeds green bond to negate elevated volatility. Retail demand held up as the institutional market became skittish, allowing Genesis to close the transaction with acceptable pricing and volume.
Resimac pivoted to an Australian dollar-only structure for its first securitisation of the year. Deal sources say the domestic market retains capacity to support structured finance – at the right price – despite an increasingly turbulent macro backdrop.
Plenti Finance rode volatile conditions to print the Australian dollar market’s securitisation of 2022 not backed by mortgage or auto-loan collateral. The issuer acknowledges that pricing has widened on the back of increased market volatility but says the difference was not material.
Morrison & Co has refinanced debt linked to New Zealand schools-focused public private partnership with a use-of-proceeds sustainability loan. Deal sources say the facility is New Zealand’s first use-of-proceeds loan to be recognised and accredited for its environmental and social credentials.
Reliance Rail says the addition of sustainability-linked features to its green loan will help it achieve environmental goals beyond its existing asset pool, such as energy consumption targets and emissions reduction. Any margin savings will be directed to sustainability improvements rather than reducing funding costs, which the borrowers says is a distinguishing feature of its facility.
Australian sustainable finance bankers are relatively confident about further growth in bond market flow from their sector in 2022. The market continues to evolve, making product innovation and, in particular, ever-higher expectations on standards and reporting a notable focus.