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.
Kauri issuance rebounded in May-June as more than NZ$2.6 billion (US$1.7 billion) priced, including a rare 10-year transaction of record volume for the tenor. Technical demand drivers are at play but intermediaries suggest positive conditions could remain even as a supply gap closes in the second half of 2020.
On 22 June, Nordic Investment Bank (NIB) (AAA/Aaa) launched a five-year, minimum NZ$150 million (US$96.1 million), Kauri transaction. Indicative price guidance for the forthcoming deal, which is expected to price on the day after launch, is 43 basis points area over mid-swap. ANZ and BNZ are leading.
Municipality Finance (MuniFin) (AA+/Aa1) launched a new, minimum NZ$100 million (US$65.3 million), three-year Kauri deal on 11 June. The forthcoming transaction has indicative price guidance of 46 basis points area over mid swap. Pricing is expected on the day after launch, says sole lead manager BNZ.