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ANZ looking at alternate NZ funding after pricey US trade |
ANZ says the US$2 billion transaction it brought through its New Zealand subsidiary ANZ National (AA/Aa2/AA-) on July 11 was part of its normal annual funding requirement, playing down market speculation regarding the surprisingly wide price the issuer paid – 312.5 basis points over US Treasuries.
“For a number of regulatory reasons ANZ National accesses the market directly for at least a portion of its funding” explains Rick Moscati, Melbourne-based group treasurer at ANZ. “The premium reflects the current state of global markets and an additional premium investors are currently demanding for New Zealand unguaranteed subsidiary risk.”
However, given the wide valuation of the US deal, ANZ is attempting to avoid being cornered into premium-priced trades for its New Zealand subsidiary in future. Moscati says the bank “is currently examining alternate funding solutions and corporate structures which are expected to provide better access for funding the New Zealand subsidiary business in the current environment.”
At the time of the US transaction observers commented on the wide price of the five-year deal, with nabCapital research, for instance, saying: “ANZ National’s deal certainly raised eyebrows and it appears the bank certainly paid up to get a large deal away for a NZ subsidiary.” That analyst comment also included the suggestion that the deal “included some very large orders”, with market sources subsequently suggesting a single US investor took up to US$1.5 billion – or even more – of the total.
However, Moscati says the US dollar bond was sold to a book of over 80 investors, although he declined to comment on specifics of the book’s makeup. He also says there was no significance to the timing of the US dollar deal, which came a day after ANZ National priced CHF275 million (US$269.05 million) of two-year paper and just before the same issuer also brought a brace of NZ$50 million (US$37.97 million) domestic transactions.
Moscati also says ANZ still has current capacity to fund its New Zealand subsidiary from the parent. The parent company has raised around A$34 billion so far in its September-September financial year, and Moscati says any additional trades brought to market before its end would “largely be pre-funding for next year”.
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Last Updated ( Monday, 21 July 2008 )
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