News
The Reserve Bank of Australia met market expectations in its first statement on monetary policy of 2022, confirming the imminent end of bond purchases and taking a markedly more positive tone on the economic outlook. But analysts interpret the lack of a move to a more aggressive rate hiking cycle as a more dovish tone than the reserve bank could have taken, pushing back higher rate expectations to the second half of the year.
Early-year supranational, sovereign and agency deal flow in the Kauri market demonstrates the attractiveness of New Zealand issuance to global borrowers, as deal sources say each of the three transactions completed by late January provided a positive outcome for its issuer.
Westpac Banking Corporation’s first domestic senior-unsecured transaction since 2019 met expectations that have become increasingly positive in the wake of multiple successful deal prints at the start of the new year. Volume was at the upper side of estimates thanks to ongoing strong investor appetite for bank paper.
Asian Development Bank took advantage of favourable Kauri market conditions to price its largest-ever New Zealand dollar deal on 18 January – also the first new issuance in the market this year. The issuer says limited Kauri supply, ample investor cash balances, attractive outright yield and upcoming redemptions helped the successful placement.
Toyota Finance Australia says executing at the very start of the year was a key aspect of its return to the euro market after an almost two-year hiatus, as it aimed to price before deal flow picks up in the weeks ahead. The issuer priced €1.15 billion (US$1.3 billion) of three- and six-year bonds on 5 January, a notably early start for Australian corporate issuance.
Australian strategists and traders believe the Reserve Bank of Australia is unlikely to change its monetary-policy plans in response to a more aggressive US Federal Reserve, despite rising yields over the last month. The divergent central-bank paths could lead to more volatile markets, however.
National Australia Bank returned to the offshore term funding market at the start of the year after electing to stand back from more turbulent markets in Q4 2021. The bank says positive results in the sterling covered-bond and US dollar markets further demonstrates a constructive new-issuance environment.
Commonwealth Bank of Australia has set a wider new-year pricing benchmark in the Australian dollar market but was rewarded for its willingness to meet the market on price with a jumbo book and record final volume. The issuer says the print reflects a constructive tone in the local market and that regulatory change has not negatively affected Australian dollar demand.
Jemena says the green element of its latest round of debt refinancing was key to investor interest, with the use-of-proceeds model attracting demand to the issuer’s recent private placement and syndicated loan deals. The late 2021 transactions represent the company’s first foray into green finance, a tool it expects to develop in future transactions.
The lingering impact of fiscal stimulus continued to support a structurally altered Australasian debt market in 2021, transaction data from the KangaNews deal database show. Corporate and securitisation issuance capitalised on the absence of major-bank supply, while sustainability-aligned deal flow reached new heights.
European Investment Bank kicked off the 2022 Kangaroo market Wednesday, pricing the largest-ever Australian dollar green, social and sustainability bond from a supranational, sovereign and agency borrower. The issuer says pricing was attractive versus its core-currency markets as it seeks greater investor diversification through its green- and sustainability-funding programmes.
KangaNews and RBC Capital Markets hosted their annual Australian bank funding roundtable in November 2021 at an important juncture for the sector. The pandemic – or, more accurately, the government and central-bank response to the pandemic – had a profound impact on Australian major-bank funding.