News
South Australian Government Financing Authority (SAFA) came to the fore in Australian alternative reference rate (ARR) innovation on 6 June, when it priced the first-ever deal linked to the Australian overnight index average (AONIA) reference rate. Deal sources say the rate is not meant to be a replacement for bank bill swap rate (BBSW), but a part of a broader suite of products Australian issuers and investors can access better to suit their needs.
Substantial growth in Australian investor participation in sovereign, supranational and agency (SSA) Kangaroo issuance is in large part attributable to the continued evolution of sustainability-linked issuance, market participants say. This could have further positive consequences in primary and secondary markets as SSAs build sustainability bond curves.
The Reserve Bank of Australia (RBA)’s decision to cut the cash rate on 4 June surprised no-one. Analysts are focusing on a perceived lack of dovish intent in the RBA statement, while an economic forum conducted immediately prior to the cut identified the local housing market – rather than global trade uncertainty – as the primary likely driver of future rates direction.
Treasury Corporation of Victoria (TCV) added a new line to the long end of its curve on 3 June, with a A$267 million (US$186.4 million) November 2034 syndication led by Westpac Institutional Bank. The deal was driven by reverse-enquiry demand out of Asia.
Treasury Corporation of Victoria (TCV) added a new line to the long end of its curve on 3 June, with a A$267 million (US$186.4 million) November 2034 syndication led by Westpac Institutional Bank. The deal was driven by reverse-enquiry demand out of Asia.
Svenska Handelsbanken prioritised spread over volume in its Kangaroo return on 22 May, deal sources suggest, with pricing within its global curve a clear priority. The transaction is also the first financial-institution Kangaroo deal to print in 2019. Leads say this is because of favourable funding conditions globally and a range of available issuance formats.
On 30 May following the release of the New Zealand budget, New Zealand Debt Management (NZDM) revealed a NZ$10 billion (US$6.5 billion) borrowing requirement for the 2019/20 financial year. The programme is NZ$2 billion higher than forecast at the half-year economic and fiscal update (HYEFU) in December 2018.
The Australian Office of Financial Management (AOFM) issued a new line by tender on 29 May. A lower net-new-issuance requirement has allowed the sovereign borrower to weight its issuance strategy towards tenders this financial year, only using syndication to debut a new 2041 nominal bond and a 2050 inflation-indexed bond.
Bank of Queensland (BOQ) says its conditional pass-through (CPT) covered-bond platform offers an important point of funding differentiation following its second-ever euro deal in this format. At a time when a cluster of BOQ’s peers are pursuing residential mortgage-backed securities (RMBS) issuance, BOQ says CPT covered bonds offered an attractive cost of funds and further investor diversification.
KangaNews is proud to reveal the results of its 2019 Fixed-Income Research Poll, in which Australian institutional investors are asked to vote for the best research providers across a range of sectors. The ninth iteration of the poll has a familiar look across most categories – consistency of performance is a hallmark of this survey – but there are still a clutch of changes at the top of specific categories.
Participants in Australia’s first syndicated sustainability-performance-linked loan (SLL) say the product could catalyse a significant uptick in corporate engagement with environmental, social and governance (ESG)-linked funding. SLLs are becoming more prominent globally and Sydney Airport’s debut demonstrates that they can have wider applicability for corporate borrowers than other ESG debt instruments.
On 27 May, following the release of the Victoria state budget, Treasury Corporation of Victoria (TCV) revealed a total funding requirement for the 2019/20 financial year of A$5.5 billion (US$3.8 billion). The task is an increase from the A$4.6 billion forecast 2018/19 requirement announced following the 2018 state budget.