News
Improved relative pricing and a desire to diversify a substantial total loss-absorbing capacity (TLAC) requirement led Mitsubishi UFJ Financial Group (MUFG Group) to print its debut Australian dollar benchmark deal in September. The issuer is putting its green-bond-qualifying assets behind its TLAC programme in a bid to maximise the participating investor base.
The New Zealand Financial Markets Authority (FMA) says the purpose of its consultation on socially responsible investment (SRI) product is to foster a supportive regulatory environment while ensuring such product is appropriately labelled for retail investors in particular. Simultaneously, the regulator is also attempting to take a flexible approach to same-class exemption for green, social and sustainability (GSS) bonds.
John Deere Financial (John Deere) priced its largest-ever Australian dollar deal in on 24 September. The issuer says deepening liquidity allowed it to fund a greater proportion of its Australian business locally and that it now has greater confidence on local volume.
The nonbank lending sector represents a significant portion of the Australian securitisation market. While the volume and frequency of deals indicates an increasing level of investor comfort with the sector, myths pertaining to nonbanks’ lending practices persist and could inhibit future funding growth.
The Australian Securitisation Forum (ASF) is consulting with market participants on interest-rate benchmark reform as it relates to securitisation. The consultation comes amid accelerating global moves to adopt alternative reference rates and fallback language, and ongoing questions about the resilience of the Australian securitisation market’s most commonly used benchmark.
Pacific National printed Australia’s largest 10-year corporate bond so far this year and the issuer’s largest in the domestic market on 18 September. Deal sources say the transaction makes clear once again that domestic support for 10-year corporate paper is available for issuers willing to test it.
Wingate Consumer Finance (Wingate) printed its debut public asset-backed securities (ABS) transaction on 18 September. The issuer believes it is capitalising on a niche in Australia’s increasingly competitive lending market and now has the funding diversity to pursue its growth plans.
New Zealand Debt Management (NZDM) printed its first syndicated transaction in 18 months on 18 September, establishing a new May 2031 line. The deal was well-received according to the issuer, with nearly half of the transaction allocated to offshore accounts despite feedback that the relative value of New Zealand government bonds to other sovereigns has declined.
Spark Finance (Spark) returned to the Australian dollar market on 11 September with its first deal since its inaugural Kangaroo in October 2017. Deal sources say there is latent demand in Australian dollars resulting from an undersupply of corporate credit, while the lower-for-longer interest rate environment is pushing demand further out on the curve.
Housing New Zealand (Housing NZ) tapped two of its existing lines on 11 September for an aggregate NZ$600 million (US$383 million). The transaction was the first under a rebranded framework which incorporates all the issuer’s outstanding lines as wellbeing bonds explicitly to signal alignment with the New Zealand government’s broader wellbeing objectives.
Central Nippon Expressway Company (CENEXP)’s first public issuance of Australian dollar denominated bonds was issued off the back of reverse enquiries from investors, deal sources say. After initially announcing an Australian and US dollar mandate, CENEXP elected to print A$350 million (US$240.6 million) of five-year bonds on 11 September in the Reg S market.
Origin Energy (Origin) returned to the euro market for the first time since 2014, on 5 September, with a deal that highlighted European investors’ appetite for duration and for issuers with clearly articulated environmental, social and governance (ESG) strategies. Deal sources say the euros market remains highly globally competitive for corporate issuance.