Big-four funders talk strategy as the season changes

KangaNews and RBC Capital Markets hosted their annual roundtable for heads of funding at Australia’s big-four banks in Melbourne on 13 August. After an almost unprecedented period of benign market conditions, 2018 has posed new challenges and seen execution risk back on the table. The issuers acknowledge the revived headwinds but say they are well-placed to navigate them.

  • Alex Bischoff Executive Director and Head of Global Funding WESTPAC BANKING CORPORATION
  • Mostyn Kau Head of Group Funding ANZ BANKING GROUP
  • Kylie Robb Head of Group Funding COMMONWEALTH BANK OF AUSTRALIA
  • Eva Zileli Head of Group Funding NATIONAL AUSTRALIA BANK
  • Laurence Davison Managing Editor KANGANEWS
  • Gerard Perrignon Managing Director, Debt Capital Markets RBC CAPITAL MARKETS

Perrignon Conditions were clearly stronger when we had this discussion last year than they are now, including spreads near record tight levels and a broad base of investors engaged across a range of asset classes. In your minds, what are the most notable changes from an execution perspective?

KAU Conditions aren’t the slam dunk they were as recently as January this year. But underlying fundamentals are still pretty good – it’s mainly technical factors and risk around geopolitics and trade wars that are causing challenges.

We are seeing equity markets testing new highs and credit periodically rallying, but it feels like we are at one of those inflection points during which something fairly innocuous can set off markets and unwind a lot of what I’d call ‘goodwill’. That’s a gut-feel call on my part, but I have a sense that a more serious correction is not out of the question.

ZILELI The real change from my perspective is investor participation – in volume and in number. Comparing our January and June US dollar trades, there was a difference in the granularity of the books. Issuers have to do a lot more due diligence ahead of trades now, and even then we can’t be certain of success in the same way we could be in 2015 and 2016. Liquidity was really phenomenal in those years, and navigating the deal process is trickier now. As Mostyn Kau says, it’s no longer a slam dunk.

Investors are more wary about geopolitical concerns and are looking for higher new-issue concessions. They don’t want to invest in a bond and see it widen in the secondary market straight after issuance. This is a change, and I don’t see conditions reverting to what they were in 2015-16.

PERRIGNON In those years my sense was that the top 15-20 per cent of deal books often comprised ‘momentum’- type investors that participated because credit spreads were tightening and conditions felt very good. That portion of the order book seems to have been stripped away, with the result that a multi-tranche, US dollar book from a major bank is less likely to generate US$6-7 billion of demand. It’s more like US$4-5 billion nowadays.

ZILELI I think that’s right, but we’ve also seen fewer of the mid-range investors – by which I mean US$25-50 million tickets – active in our books. If anything, we can be more reliant on a few of the bigger accounts. These accounts tend to be quite price-sensitive, and at times we have seen some of them drop out of books on the back of a 1-2 basis point tightening.

KAU I agree that investors have a lot more pricing power than has been the case. Until recently, market momentum and investor inflows meant they had to come into deals. The pricing power has definitely shifted to investors from issuers.

BISCHOFF This is all true, but I’d also say that where we are now is more of a normal state of affairs than what we experienced over the past couple of years. Volatility isn’t abnormal. The way I’d describe the change is to say that a year or two ago any of the Australian majors could have executed more or less any trade on more or less any day, whereas execution risk has now returned.

We are already seeing the majors change their execution strategies in response – for instance both Westpac Banking Corporation (Westpac) and Commonwealth Bank of Australia (CommBank) have issued dual-tranche deals in recent weeks, to minimise execution risk. Westpac and National Australia Bank (NAB) have both issued yen bonds recently, as we seek funding diversity – and we are seeing issuance of securitisation and covered bonds for the same reason.

The market has evolved, but as funders we will evolve along with it. I don’t think execution risk across the programme has materially changed, but it is more in evidence on a market-by-market basis.

ZILELI That’s a good point. The conditions we are experiencing now are definitely closer to long-run normality, and it is in conditions like these where we – hopefully – show our skill as funders.

BISCHOFF You don’t have to use all the tools available when you can issue US$4-5 billion in a single transaction. That’s a significant chunk of our annual funding requirement done in one deal, and it means a lot of alternative currencies and products simply weren’t required.

“Investors have certainly been pleased with macroprudential measures and it has been good to be able to report slowing growth in the areas that have been targeted. Housing is still an investor focus, though.”

Davison Changes in the deal process – around things like deal disclosure – emerged during the period of benign funding conditions when presumably their impact was easily manageable. Are those changes having a greater impact in a more challenging execution environment?

ROBB I think Alex Bischoff’s point is also important here – that we shouldn’t overstate the challenge current markets present. For example, CommBank printed A$3.5 billion on 10 August in what was the largest domestic MTN we have ever issued. There are still good deals to be done in every market, we just have to be more careful to align issuance to periods of strength. It’s a more dynamic market, and we can’t assume we will be able to execute on any day we want.

BISCHOFF I agree – I don’t think CommBank would have had the same result had it issued in June. The domestic market has recovered in July and into August, and CommBank used a window of good execution conditions to issue.

ROBB It is also true that there are more issues to navigate including around disclosure and engagement with investors.

BISCHOFF We have been dealing with similar considerations in other markets, though – including in Europe, where new execution processes have been in place for a while. We solve the execution-risk issues in various ways, including via price and dual-tranching.

We have seen the domestic investor base shifting in recent years, specifically to a place where new-issue premia are more relevant. Not every deal will go well, but I think we have reached a place where deals are appropriately tranched and where price discovery generates the appropriate size outcome.

Holding position on capital

Funding markets may be experiencing renewed volatility but the Australian banking system is enjoying an unusual period of calm when it comes to capital evolution. There is more to come, but there is also confidence that the heavy lifting is complete.

PERRIGNON Investors know the Australian banks have very conservative settings on the net stable-funding ratio and liquidity coverage ratio. Going forward, what should they expect as a regulatory focus on capital?

ZILELI We have all made submissions on the future of risk weights and we are waiting on the outcome. I believe this is going to be rolled up in a forthcoming paper covering the nature of “unquestionably strong” capitalisation. That is due at the end of this year – though it has already been pushed back.

We are also awaiting a discussion paper on total loss-absorbing capacity (TLAC), but again this seems to have been delayed. No doubt this will emerge at some point.

KAU The risk-weight issue is in train, and it will have a flow-on impact on the attractiveness of capital-relief residential mortgage-backed securities. This could potentially be quite an important development.


Recalibration of risk weights should be a good story for investors. It suggests the Australian regulator is seeking better to align asset risk with capital in banks' portfolios - which should be a message of further strength in the balance sheet.


Perrignon We are witnessing some key structural changes in the market backdrop. Rising US rates, moderation of QE elsewhere in the world and taxation reform are front of mind. How are these embedding themselves in markets and to what extent do they require changes to funding strategy?

KAU I think we are facing a much bigger challenge in the next couple of years, because of the sheer volume of liquidity that is going to be drained from the system.

I believe G4 central-bank balance sheets alone have contributed something like US$12 trillion to global liquidity. While that won’t to be unwound in one fell swoop – and it can be adjusted if markets weaken significantly – I can’t envisage a scenario in which the unwind won’t have a significant impact on all markets, including credit.

The volume of liquidity in the system has covered up all manner of cracks in the past 3-5 years, and its withdrawal is clearly the largest single challenge facing us.

BISCHOFF I agree. This structural element drives our longer-term funding strategy, for instance the fact that we have significantly shifted duration longer in each of the past four years to take advantage of structurally flatter credit curves. Technical factors will always drive our near-term thinking, but everyone needs to be able to think with both perspectives in mind.

“If the movement in the base rate is prolonged the banks will clearly have to work through it. But it’s absolutely critical to reiterate that this is not an issue of funding pressure and it will not affect how we go about funding.”

ROBB Issuing a variety of products in a range of currencies and managing timing carefully is increasingly important in response to this backdrop. It is amazing how quickly sentiment changes given these structural concerns – literally on a week-to-week basis.

It’s not just that there are a lot of events that make the market nervous – which there are – but market participants often differ in how they interpret events. It’s more important than ever to stay plugged in to investor sentiment.

Earlier in 2018 we issued senior sterling bonds and US dollar covered bonds, both for the first time in more than three years, to capture pockets of investor demand at attractive pricing.

Davison One specific area where there has been commentary around the retreat of liquidity has been US tax reform taking away funds held offshore by US companies – a component of which was being invested in global credit. How much impact has this had on Australian major-bank deal books?

BISCHOFF I think it’s important not to get too caught up in comparing liquidity conditions to 2016. If you go back to 2012, say, issuing US$1 billion was a good outcome, and both Westpac’s most recent US dollar trades have printed more than US$1.5 billion in the five-year tranches. There are still good pockets of liquidity to be found and a larger investor base than there used to be.

Losing a group of investors as a result of something like tax reform just adds to the atmosphere of caution we have been discussing. There is still good liquidity to be found if you are careful around timing and execution.

ROBB I think tax reform is a good example of the market jumping at a headline without fully understanding the implications. What’s going on as a result of US tax reform is nuanced and complicated, and in fact I think the impact to flow of funds in the short end is more significant than the corporate cash investment story on which a lot of people initially focused.

“We would certainly be conscious of increasing our exposure to wholesale markets given renewed volatility. There is a system-wide funding gap, but we are yet to see it flow through to our balance sheets.”


ZILELI There was a lot of selling when the news broke and this had a widening impact on credit spreads. But this settled down when the market fully absorbed the news.

What we are left with is the withdrawal of two larger investors – one that isn’t playing at all and another that is only active in much smaller volume. Some of the smaller corporate accounts are still active. But it’s true that some orders have been lost, and we either have to make this up elsewhere or have smaller order books.

KAU What’s interesting is that the selling was probably less pronounced from the accounts directly affected by US tax reform than it was from Asian investors that were more driven by what they expected to happen elsewhere and with basis-swap movement. Their activity certainly had a greater impact on price.

Our experience with corporate investors is the same as NAB’s: there are two big accounts that have largely gone missing, but there is another group – albeit with smaller tickets – that hasn’t changed its behaviour at all.

PERRIGNON There was a period earlier in the year when consequential volume of US dollar investment-grade product came back into the system from some sell-side programmes, but while it certainly affected the market one could argue that dealer balance sheets soaked it up in a fairly efficient manner.

BISCHOFF There has also been a supply-side counterbalance in the sense that issuers have been coming to market less frequently.

Overall, we can’t say that everything has been rosy with these tax changes and there has certainly been an incremental impact on demand. I don’t think any of us would say we think liquidity is going to get easier over the next 12-18 months, either. But it’s marginal, and it’s taking us back to a point that’s still better than it was 5-6 years ago.

PERRIGNON I’d also suggest that timing has worked well for the banks – not just in Australia but globally – when it comes to preparation for the liquidity-coverage ratio and net stable-funding ratio. That would be a much tougher task in the more difficult conditions we are experiencing now, whereas a lot of the heavy lifting – around issues like extending duration – has already been done and housing lending is moderating.

It’s probably a good time for the Australian banking sector as a whole to be funding around A$110 billion (US$81.4 billion) in term markets annually rather than A$140-150 billion.

BISCHOFF I don’t think this gets talked about enough, much as we say quite clearly that the real inflection in funding volume was around 2016. Including New Zealand, as a system we were funding close to A$160 billion – and it’s a pretty dramatic shift to roughly A$110 billion this year and next. I suspect most of us have reduced the amount of short-term funding we are doing as well.

Structured issuance suffers at the margin

The Australian majors say covered bonds and securitisation remain an important component of the funding tool kit. Issuance of both has ben subdued of late, though the rationale is not the same for both asset classes.

PERRIGNON Covered-bond issuance was slightly down in outright volume in 2017 but it probably forms about the same proportion of wholesale funding as it has in recent years. What is the outlook from here?

BISCHOFF The original concept of covered bonds was as a triple-A contingent funding tool. If the next 12-18 months features more volatility and significant periods of spread widening, having a triple-A instrument available should allow access to certain offshore markets when senior is volatile.

If these conditions don’t eventuate we will likely continue to focus our covered-bond issuance on duration and investor diversity in core markets.

ROBB The double counting of covered bonds under the bank levy detracts from the relative economics and the asset class gets unfavourable net stable-funding ratio (NSFR) treatment.


It's notable that current RMBS pricing is close to five-year domestic senior-unsecured, which suggests senior is still the more favourable issuance option. Traditionally, we saw this spread closer to the midpoint of 3-5 year senior levels.


Davison Putting aside credit growth, is that number – roughly A$110 billion – the baseline for total big-four funding expectations going forward? Presumably duration extension reduces refinancing velocity.

ROBB We certainly have a pretty material drop in term-funding requirement, to A$33 billion last year and around A$25 billion this year from A$43 billion in 2016/17. This is driven by regulatory requirements, a changing balance-sheet gap and a significant short-to-long funding switch.

As you say, a core driver of tenor extension is reducing refinancing risk. Given the macro environment we’ve discussed, I don’t think any of us would want to face the sort of term-funding requirement we navigated a few years ago.

The reduction in term-funding requirement makes it possible to be well supported by the pockets of demand we’ve found and not to need every single investor to be active.

ZILELI We issued A$32 billion for NAB’s Australian entity last year and this year it will be in the low A$20s billion. This is primarily driven by refinancing, and while this increases in subsequent years we are very mindful of how the additional funding we put on will affect maturities in subsequent years.

KAU It’s also worth remembering that the Australian dollar is a great stabiliser. When we had to do a collective A$160 billion in 2016 one of the drivers was the Australian dollar being up by 10 per cent. Generally speaking, when the currency appreciates the world is in a pretty good place. This is when we have to do more funding offshore.

Conversely, when the Australian dollar is weak – certainly if it was close to US$0.60 – we would have to do a lot less offshore funding because what we issue would be returning more Australian dollars. This is a really good ‘right-way risk’ for the system.

Davison There have been several references to the value of funding diversity. Does this mean the banks are, at the margin, more willing to pay a premium for currency and asset-class diversity or is diversity coming because the economics of a wider range of issuance options have improved?

BISCHOFF It’s always a mix of the volume we need to issue and what we can get out of core markets – which tend to price most competitively. It’s not all about price, either – a specific market might offer something appealing on duration or product, for instance.

There’s no single driver, but if one or more markets are offering clearly better value it’s pretty difficult, in the context of a smaller funding programme, to justify issuing elsewhere. We hadn’t issued in the yen market for two or three years, for instance, purely because the basis swap had made it uncompetitive.

ROBB It tends to be market opportunity in a currency or product that drives us to issue, with diversification being a nice added benefit rather than a primary driver.

When we issued €500 million (US$579 million) of floating-rate notes in May we saw a very different investor book from our typical fixed-rate euro deals. But we decided to launch as it was an appealing price. The investor diversity was a bonus.

ZILELI It depends on the funding task, so this year – with a smaller task overall – we wouldn’t have issued a Samurai bond if the economics weren’t appealing. In fact, the yen basis had improved and we priced yen five- and 10-year notes pretty much in line with what we would have done in euros when swapped back to Australian dollars.

There wasn’t any consideration of a diversity premium for us, because the pricing was there. Actually we would have been more inclined to contemplate a diversity premium in previous years, when the funding task was larger.

BISCHOFF We still do annual roadshows to a range of jurisdictions, whether or not we have been issuing – to ensure we stay in front of the larger investors. What’s encouraging for us is that we had the largest range of investors we have ever seen in a Samurai deal when we priced this year, even though we hadn’t issued for two-and-a-half years. It wasn’t just big banks, either – we had involvement from a number of smaller and regional accounts. They hadn’t let their mandates lapse even though we hadn’t issued for some time.

Sustainability and blockchain feature in funding innovation

Green and sustainable debt should become even more prominent in the major-bank funding mix, the big four say. This is not the only funding innovation catching the eye, either.

DAVISON Sustainable-debt issuance is an evolving market and all the majors seem to have taken slightly different strategies to date. Perhaps the banks could give an update on their specific approaches and issuance strategies, and how firmly they are established?

ROBB Commonwealth Bank of Australia has a strong commitment to respond to the challenge of climate change and is active in low-carbon financing to support our transition to zero emissions by 2050. In the sustainable-issuance market, we are focused on a rigorous approach to socially responsible investment asset classification. The transaction we did last year was, at A$650 million (US$481.1 million), the largest green bank deal in Australia and was accredited by Climate Bonds Initiative.

We have communicated to investors that we want a robust, sustainable green asset class. The management task around assets is not inconsiderable as a result. In addition to identifying eligible assets, this involves ongoing monitoring and reporting as well as validating and separately auditing those assets. The feedback we have received, especially from the international investor community, is that this approach has long-term value.

KAU It’s right to describe this as a developing space, and as market participants become more aware of environmental and social concerns it will get bigger both from an asset perspective and on the bond-market inflow side. We will meet the demand from investors, because it naturally makes sense to match the two sides of the balance sheet.


I'm sure we all share some of the frustrations with the status quo when it comes to execution, so it's encouraging to hear that blockchain is gradually delivering on some of its potential and starting to be applied in real money markets.


Davison The Australian base rate has continued to trend upwards through 2018. How has this affected funding strategy?

KAU It’s potentially a significant development. The relationship between US dollar Libor and overnight indexed swap (OIS) has clearly broken apart with significant divergence on the Australian side in recent times.

This is due to a number of – sometimes conflicting – reasons, but it’s important to note that these are mainly technical in nature. They certainly do not relate in any way to funding pressure. It’s obvious that we are not experiencing funding pressure, but it’s also a message we are making clear to investors.

Our sense is that the cause is a combination of lots of small things, mainly technical factors, including elevated repo demand and basis swaps.

The impact is not insignificant. I think CommBank’s most recent results said that each 5 basis points of movement in the base rate means 1 basis point of net interest margin. ANZ Banking Group has a smaller household balance sheet so the impact is not as great, but it’s still material.

How the banks deal with this is yet to be seen. But if the movement in the base rate is prolonged they will clearly have to work through it. The environment makes it much more difficult to do so than it would have been five years ago – from both a funding and a political perspective. But it’s absolutely critical to reiterate that this is not an issue of funding pressure and it will not affect how we go about funding.

ROBB The market is still trying to determine how much of the move is technical versus structural in nature. A number of different reasons have been ‘blamed’ for the move, but until we can pin down the fundamental driver or drivers I think it’s hard to know whether it is transient and where base rates might stabilise.

There is good evidence to support the relevance of international-bank Australian dollar funding requirements and the flow-on impacts to FX and the bank-bill swap rate.

As for the term-funding impact, I agree with Mostyn Kau in saying I don’t think it materially alters the way we think about markets. We haven’t seen investors particularly concerned about this issue, though they are interested and want to understand what’s happening.

“The market has evolved, but as funders we will evolve along with it. I don’t think execution risk across the programme has materially changed, but it is more in evidence on a market-by-market basis.”


Davison Has the protracted nature of the base-rate run-up come as a surprise? Our sense is that a lot of market participants initially thought it would reverse earlier in the year – especially as the initial increase matched a similar move in US Libor that did unwind much sooner.

KAU It’s a difficult question. What happened initially was wholly attributable to international developments, so it has really only been the past two or three months in which the Australian system has broken away from the US. It was very well correlated prior to that.

We’re not talking about a long time, in other words – but there’s no way of knowing for how long it will last. I suspect it will moderate, but that’s not a conclusive view.

ROBB Market participants will certainly be watching the September- and December-period ends for a guide on where the cyclical peaks and troughs might land.

BISCHOFF At the end of the day, our funding decisions will be driven much more by credit growth and refinancing. We are no longer seeing double-digit deposit growth and the ability to shift that deposit balance materially is restricted, although credit growth is also moderating.

Perrignon The national savings rate in Australia has been in decline for some time but we haven’t yet seen this translate into challenged deposit growth. What is banks’ read on deposits?

ROBB In our recent results we highlighted transaction-account growth as a highlight of the past financial year. The gap between new lending and deposits only grew by A$2 billion – at A$11 billion versus A$9 billion – so, for us, deposits are still largely funding asset growth.

BISCHOFF The test is whether any of the banks are confronting a bigger wholesale funding task than 12 months ago, and the reality is that we are all likely to land at smaller or similar numbers to last year.

ZILELI We would certainly be conscious of increasing our exposure to wholesale markets given renewed volatility. Deposit growth has been lower than credit growth, but system-wide credit growth has been moderate – and quite a lot of it has gone to regional banks and nonbanks anyway. There is a system-wide funding gap, but we are yet to see it flow through to our balance sheets.


Perrignon What is investor feedback on the Australian housing market at present? Do investors seem comfortable with macroprudential controls and with the soft landing that so far seems to be developing?

ZILELI Investors have certainly been pleased with macroprudential measures and it has been good to be able to report slowing growth in the areas that have been targeted. Housing is still an investor focus, though, simply because it is such a significant component of our gross loans and acceptances – 58 per cent for NAB.

The questions we get asked are about our arrears in particular, and they also tend to match the headlines. This year, for instance, we have had a lot of questions about underwriting and borrower expenses – because there was an article on the topic written by one of the research houses.

In many respects, when we go offshore our job is around education. We’ll explain, for instance, that our approval process doesn’t just accept the income a potential borrower declares and we do look at payslips and deposits, and that we have changed the granularity of the process we use on the expenses side.

Really, what investors are asking is whether what they read is true. They want to see how our practices align with the headlines.

BISCHOFF Offshore investors fundamentally view the credit profile of our mortgage books as strong. Delinquencies of more than 90 days have ticked up but not materially, and if anything the message we were giving investors 12 months ago was that they should be more concerned if they saw another year of double-digit house-price growth after strong growth over the preceding five years.

Davison Has the nature of dialogue with investors on housing changed since the introduction of macroprudential measures in the second half of 2016?

ROBB There is generally a good level of comfort in the investor community around recent house-price moves. If the strong growth trajectory had continued it’s likely it would have been a problem, and in this context the measures the Australian Prudential Regulation Authority (APRA) introduced have played out as they were designed to do.

In particular, investors are seeing APRA’s removal of the 10 per cent investor-only growth limit as evidence the market has responded as intended.

KAU The macroprudential measures have brought to the fore some questions around interest-only lending that happened in recent years and that is now coming up for resetting. This is because there have been headlines about something like A$120 billion of such loans each year for the next couple of years.

The Reserve Bank of Australia gave a speech a few months ago about some of the mitigating factors around this debt, but it’s not surprising that offshore investors are interested in the topic given what happened with resetting loans in the US.

We emphasise that the mortgage market in Australia is very different structurally from the US. Where lending standards in the US were loosening at the time, ours are tightening. It’s a very different set of circumstances here too, for instance, than in some European countries – where banks were lending up to 125 per cent loan-to-value ratio – or in the US, where they were lending significant volumes of subprime.

“It’s not just that there are a lot of events that make the market nervous – which there are – but market participants often differ in how they interpret events. It’s more important than ever to stay plugged in to investor sentiment.”


Davison China has traditionally been a focus of offshore investors and it is back in the headlines around global trade. What is the feedback from investors on China at the moment?

BISCHOFF Going back to 2012, I expect all the majors would have had investor presentations addressing China in some detail, such was the interest in exports and commodity prices. Nowadays, we might have one table in a presentation speaking to this.

My sense is that investors are more comfortable with the way in which China has managed its slowdown and the tools it has available to do so – and therefore also with the impact this has had on Australia.

Having said all this, we haven’t roadshowed since May and it is in the period since that rhetoric around trade has really picked up. Certainly our experience is that global investors have been much more interested in the housing market and the royal commission.

KAU It’s certainly all about the mortgage market in our experience. We go through investor meetings in which China isn’t mentioned at all.

ZILELI I actually think things are changing. Our experience was the same as that just mentioned – China had gone away completely from investor agendas. But we were in Europe in June, and there were questions specifically about the China-US trade war, tariffs and potential impacts on Australia.

“I think we are facing a much bigger challenge in the next couple of years, because of the sheer volume of liquidity that is going to be drained from the system.”


Davison What are global investors asking about the royal commission?

BISCHOFF They want to understand how it will affect the underlying quality of our credit and whether there are potential tail-risk scenarios that could affect them as credit investors. They want to understand the degree of government intervention they can expect and how it will affect their investment decisions.

To be fair, it’s hard for us to give a definitive response to these questions – other than to say, at a very high level, that it would be naïve to assume there will be less regulation in future than there is today. How that will affect credit is unknown at this stage.

ROBB Investors are, quite rightly, asking a lot of questions. But for the most part they are also taking a wait-and-see approach. There is a long way to go in this process: the commission needs to review all the evidence and make recommendations, then the government has to decide how to respond to those recommendations.

ZILELI We were asked about the royal commission in most of the investor meetings we had in Europe. They are expecting some changes and they want to know what they will be – which we don’t know. My suspicion is that investors are concerned about some of the cases they will have seen offshore, with large fines coming out of reviews into bank conduct.

KAU That’s exactly what I was going to say. Without being flippant, this is nothing compared with what investors will have seen offshore.