Pricing became challenging for Australian issuers in the Asian-targeted US dollar Reg S market later in the first half of 2018, after a flurry of corporate transactions over the preceding 12 months. But market participants in Asia insist the regional liquidity pool will increasingly challenge old favourites like US private placements (USPPs) and domestic issuance for Australian-origin flow.
Scaling up and broadening supply through globally harmonised issuance standards will be a key goal for the international green-bond industry in the coming years, according to market participants at the leading international forum for the sector. Asia’s significance as a source and target of issuance is only set to grow.
Recent deal outcomes for Transurban Queensland and Sydney Airport demonstrate the ongoing willingness of a range of international markets to provide liquidity to Australian corporate borrowers, deal sources say. While pricing outcomes vary, specific issuers’ funding strategies and the ongoing desire for investor diversification are at least as important drivers of market selection.
In the wake of the first euro-denominated Australian-origin nonfinancial corporate transaction of 2018, issuer and lead managers share in-depth insights into execution strategy in arguably the most volatile global backdrop seen in several years. Flexibility is key, and execution certainty should be the most pertinent consideration for issuers as the balance of power shifts back to investors.
On 14 February, ANZ Banking Group (ANZ) issued the first-ever bond from an Australian bank to be tied to the UN Sustainable Development Goals (SDGs), the first such deal ever in the euro market and just the second from any bank globally. KangaNews spoke to deal sources about the demand drivers, the bank’s own motivations and the shape of market evolution.