News
La Trobe Financial says third-party demand was sufficient to print a repeat residential mortgage-backed securities (RMBS) deal without direct investment from the Australian Office of Financial Management (AOFM). The issuer credits the presence of the government as a backstop and a secondary buyer for boosting confidence in its issuance return.
NRW.BANK posted its largest-ever Kangaroo deal on 13 May in what the issuer says is the culmination of many years of investor engagement. The agency reveals plans to extend its Australian dollar presence this year, potentially with a social bond transaction.
The secondary market for Australian dollar financial institutions (FIs) and corporates is showing signs that the severe dislocation of March and early April is abating, market participants say. A new relative-value proposition is leading fund managers to consider returning to allocation to certain sectors.
Reserve Bank of New Zealand governor, Adrian Orr, says inflation-linked bonds were chosen for inclusion in an expanded large-scale asset purchase (LSAP) programme to align with its principles for use of unconventional monetary policy. The reserve bank also hosed down talk of imminent deployment of negative interest rates but said banks should be ready for such a move by the end of this year.
Normalisation in the cross-currency market opened a New Zealand dollar funding opportunity for World Bank, as part of the borrower’s record funding drive in response to the COVID-19 crisis.
Deal sources say real-money investors embraced Bank of Queensland (BOQ)’s decision to print the first conditional pass-through (CPT) covered bond in Australian dollars. The A$750 million (US$483.8 million) five-year deal priced on 7 May.
QBE Insurance has become the first offshore-domiciled issuer to execute a capital transaction in the US 144A market since the escalation of the COVID-19 crisis, with a deal that leads say has piqued the interest of bank and insurance borrowers globally.
Including yen-dominated notes in its latest residential mortgage-backed securities (RMBS) deal is the culmination of many years work with Japanese investors, Liberty Financial says. It expects issuing in yen will form a component of its ongoing funding strategy.
Australian market participants generally expect only a gradual and marginal impact from the Reserve Bank of Australia (RBA)’s 5 May decision to make certain corporate bonds eligible collateral for open market operations. Even so, the criteria encompass a massive portion of Australian dollar corporate debt and took the market by surprise.
BNG Bank’s benchmark Kangaroo deal priced on 30 April was the first broadly distributed new line established in Australian dollars by a supranational, sovereign and agency (SSA) borrower in 2020. Deal sources say relative value to Australian semi-government borrowers drove demand.
COVID-19 has thrown up challenges even for the most established capital markets borrowers. The crisis is particularly acute for newer financial institutions with shorter track records and smaller asset books. Government support should help, but a protracted downturn could make survival of the fittest a best-case scenario.
APT Pipelines, the borrowing entity of APA Group, has returned to the euro market for the first time since its 2015 debut. Deal sources say the borrower’s credit story and lack of exposure to oil enabled a successful transaction amidst a pocket of volatility.