A sixth avenue for Basel III-compliant tier-two funding was opened up to Australia’s major bank issuers on March 5. Positive pricing outcomes from recent transactions have come hand-in-hand with question marks over longer-term capacity and consistency, but the issuer of the latest transaction says the opportunity it exploited is not only cost efficient but reliable to boot.

Bank of Tokyo-Mitsubishi UFJ Sydney Branch (BoTM Sydney) (A+/A1) mandated a new Australian dollar deal on March 5. The forthcoming deal will be BoTM Sydney’s third senior-unsecured transaction in the domestic market in 12 months, all of them four-year floating-rate notes.

On March 3, Downer Group Finance (Downer) – the issuing entity of Downer EDI (BBB) – priced a new seven-year domestic deal in what is its first visit to the market since 2013. The fixed-rate senior-unsecured deal had indicative pricing in the area of 210 basis points over semi-quarterly swap.

Rentenbank (AAA/Aaa/AAA) priced the first increase of its September 2022 Kangaroo bond on March 4. According to KangaNews data, the line was first introduced on February 26 this year, at volume of A$250 million (US$195.4 million) and pricing of 55.75 basis points over Australian government bond.

World Bank (AAA/Aaa) priced a new five-year Kangaroo deal on March 4 in what is its second Australian dollar deal of 2015. According to KangaNews data, the issuer most recently visited the market when added A$350 million (US$273.8 million) to its 2025 line on February 10. That deal priced at 44.25 basis points over Australian government bond.