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 16 October, DBS Bank (DBS) (AA-/Aa1/AA-) launched its benchmark, Australian dollar denominated covered-bond deal. The three-year deal will come in either or both fixed and floating-rate format and is being marketed at 55 basis points area over swap benchmarks. The deal is expected to be rated Aaa/AAA and anticipated to price on the day after launch.
On 16 October, DBS Bank (DBS) (AA-/Aa1/AA-) began taking indications of interest for a benchmark, Australian dollar denominated, three-year covered-bond deal. The transaction will come in either or both fixed- and floating-rate format and is being marketed at 56 basis points area over swap benchmarks.
Launch is expected in the near future, according to joint lead managers Commonwealth Bank of Australia, DBS, National Australia Bank, RBC Capital Markets and Westpac Institutional Bank. The deal is expected to be rated Aaa/AAA.
On 27 September, Volkswagen Financial Services Australia (Volkswagen Australia) revealed a book update and price guidance for its asset-backed securities (ABS) deal, Driver Australia Six Trust, following its launch on 26 September. Indicative total volume for the transaction is A$703 million (US$475.2 million), with pricing expected 2 October.