Benchmark financial institution (FI) issuance returned to the Australian domestic market in July, with a total of A$3.9 billion (US$2.9 billion) printed across a trio of public three-year deals. With market volatility limiting FI issuance in preceding weeks, deal sources say a build up in investor cash as well as issuer willingness to execute at investors’ preferred tenor drove the transactions.
ING Bank Australia (ING Australia) (A/A3/A) launched a new, benchmark Australian dollar denominated covered bond transaction on 16 August. The forthcoming deal will be comprised of a three-year floating-rate note tranche, being marketed at 60 basis points area over three-month bank bills, and a five-year fixed rate tranche, being marketed at 80 basis points area over semi-quarterly swap. Pricing is expected on the day after launch.
On 13 August, L-Bank (AAA/Aaa) launched a minimum A$100 million (US$72.7 million) increase to its February 2021 Kangaroo bond. Indicative price guidance for the forthcoming deal is 37 basis points area over semi-quarterly swap and 45 basis points area over Australian Commonwealth government bond. Pricing is expected on the day after launch, according to joint lead managers Commonwealth Bank of Australia, Deutsche Bank, RBC Capital Markets and Nomura.