Commonwealth Bank of Australia
Commonwealth Bank of Australia (CommBank) has printed the first Australian-origin transaction to reference an alternative benchmark rate. The bank issued £125 million (US$158.8 million) of one-year notes on 3 December at 40 basis points over the sterling overnight index average (SONIA), via RBC Capital Markets (RBCCM). Deal sources say the UK market is the most progressed towards base-rate change, but add that there is much work still to be done ahead of the forthcoming expiry of interbank offered rates.
Pepper Group (Pepper) announced on 21 January that it has mandated arrangers for a series of residential mortgage-backed securities (RMBS) meetings in Australia and Europe to commence on 4 February. The issuer is exploring an RMBS transaction including Australian dollars, US dollars and euros, with the euro tranche to be “exclusively backed by ‘green mortgages’” according to Pepper.
The Kauri market saw its first deal of 2019 on 16 January when World Bank priced a NZ$400 million (US$270.7 million), five-year deal. Deal sources say offshore interest in Kauri deals has waned but robust domestic participation and low relative yield are accommodative to issuers.
On 15 January, World Bank (AAA/Aaa) launched a new, minimum NZ$300 million (US$204.8 million) five-year Kauri bond. The forthcoming deal is being marketed at 41 basis points area over mid-swap. Pricing is expected on the day after launch, according to lead managers ANZ, BNZ and Commonwealth Bank of Australia.
Increased product recognition helped International Finance Corporation (IFC) more than double the outstanding volume of its Kangaroo social bond via the first tap of this line, which priced on 10 January. Deal sources say social bonds are starting to be viewed under the same socially responsible investment (SRI) criteria as green bonds, thus bringing in a broader range of investors.