KangaNews and RBC Capital Markets held their annual roundtable for heads of funding at Australia’s big-four banks at a fascinating juncture for the sector. Limited credit growth and highly supportive demand conditions are clearly assisting the funding task in the near term. The requirement to build much bigger tier-two debt books and the ever-present threat of volatility pose medium-term – but manageable – challenges.
On 4 August, South Australian Government Financing Authority (SAFA) (AA+/Aa1) launched a syndicated increase to its May 2032 line. The forthcoming deal is being marketed at 80-82 basis points area over 10-year futures contract, equivalent to 70.4-72.4 basis points area over Australian Commonwealth government bond.
Pricing in the Australian dollar supranational, sovereign and agency (SSA) market remains dislocated, intermediaries say, based on lack of alignment between domestic investor and offshore borrower pricing expectations. A number of factors are at play, not least among them the record support SSA borrowers are receiving in global markets.
On 31 July, South Australian Government Financing Authority (SAFA) (AA+/Aa1) revealed plans for a potential A$1 billion (US$719.5 million) syndicated tap of its May 2032 line in the week beginning 3 August. J.P. Morgan, National Australia Bank, RBC Capital Markets and Westpac Institutional Bank are leading.