The biggest issue in the New Zealand debt market has historically been shortage of domestic supply relative to a demand pool that has grown significantly in the KiwiSaver era. In September, BNZ and KangaNews convened their annual New Zealand roundtable with a specific goal in mind: to discuss whether the national infrastructure need, the emergence of bank securitisation and other factors can radically change the supply landscape.
International Finance Corporation (IFC)’s return to the Kauri market on 17 July was the first such transaction since early April. Deal sources say conditions have markedly improved, to the extent that pricing achieved by the issuer was more attractive than US dollar levels.
New capital requirements proposed for banks by the Reserve Bank of New Zealand (RBNZ) are likely to have consequences well beyond the banking sector. Economics in the lending market could be set for change, which may in turn reshape the dynamics of corporate bond issuance in New Zealand.
Attractive pricing conditions driven by demand outstripping supply in the mid-curve was the main factor driving International Finance Corporation (IFC)’s relatively large Kangaroo print on 10 July, deal sources say. While high-grade Kangaroo issuance volume is flat in 2019, the mid-curve has experienced something of a renaissance.
On 16 July, International Finance Corporation (IFC) (AAA/Aaa) launched a new, five-year, minimum NZ$200 million (US$134.5 million) Kauri bond. Indicative price guidance for the forthcoming transaction is 35 basis points area over mid-swap, equivalent to 52.1 basis points area over New Zealand government bond. Pricing is expected on or before 17 July, according to joint lead managers ANZ and BNZ.