The prospects for issuance of green securitised product in Australia are being explored on the back of a number of breakthroughs for green assets, including the growth of socially responsible investment (SRI), Australia’s first green-bond issue and a landmark US securitisation from Toyota Financial Service (Toyota). But Australian market participants acknowledge that local asset-backed deal flow in green format is likely a distant prospect.

Scarcity value and a lack of competing supply helped Wells Fargo & Company (Wells Fargo) (A+/A2/AA-) attract solid support from the Australian market for its A$900m (US$836.4 million) dual-tranche, five-year bond priced on August 1. However, the deal’s lead managers say strong competition from offshore markets continues to limit the appeal of the Kangaroo market to offshore financial institutions (FIs).

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Kangaroo deal flow picked up in the week under review with six new transactions while, on the other side of the Tasman Sea, New Zealand dollar activity was subdued for the fourth consecutive week.

Wells Fargo & Company (Wells Fargo) (A+/A2/AA-) priced a new benchmark senior-unsecured five-year Kangaroo deal on August 1. According to KangaNews data, the borrower last visited the Australian dollar market in May last year. That A$150 million (US$139.8 million) nine-year deal had pricing of 150 basis points over semi-quarterly swap.

Transpower New Zealand (Transpower) says investor diversity and constructive pricing drew the borrower back to the Kangaroo market for its latest, seven-year, deal. The transaction is Transpower’s second-ever Kangaroo transaction and the Kangaroo market’s third New Zealand-origin institutional deal of 2014.