Mid-curve Kangaroo market pricing has swung back into a range that some global supranational, sovereign and agency (SSA) borrowers consider to be an acceptable premium for diversification purposes, market participants say. A recent-year issuance decline shows signs of having bottomed out – though it is yet to rebound – and market users say demand for the SSA product is steadily broadening.
A rare long-end Kauri print, by Inter-American Development Bank (IADB) on 9 March, hints at potential future market development according to deal sources. With Kauri mid-curve issuance enjoying a renaissance so far in 2018, IADB’s transaction may indicate the possibility of an emerging longer-dated bid.
On 16 March, Kommunalbanken Norway (KBN) (AAA/Aaa) launched a minimum A$50 million (US$38.9 million) increase to its July 2028 Kangaroo bond. The forthcoming transaction has indicative price guidance of 51 basis points area over semi-quarterly swap and 60 basis points area over Australian Commonwealth government bond. Pricing is expected on the day of launch, according to lead managers Deutsche Bank and RBC Capital Markets.
The New Zealand Debt Management Office (NZDMO) says that with the dust settling on the outcome of last year’s election, and New Zealand dollar market conditions remaining conducive, the time was right to issue its new April 2029 nominal bond. The transaction received substantial demand from offshore, resulting in the largest-ever book for a NZDMO syndication.