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.
On 20 February, KfW Bankengruppe (KfW) (AAA/Aaa) launched a tap of its September 2026 Kangaroo bond, via Deutsche Bank and TD Securities. The forthcoming deal is being marketed at 46 basis points area over semi-quarterly swap and 59 basis points area over Australian Commonwealth government bond. Pricing is expected on the day of launch.
A debut Kangaroo transaction from General Motors Financial Company (GM) has kick-started Australian corporate issuance in 2019. Deal sources say the tenor and volume achieved were a good result for this segment of the corporate market and lay a good platform for an issuer that has also established a domestic subsidiary.
On 13 February, General Motors Financial Company (General Motors) (BBB/Baa3/BBB) launched a four-year, inaugural Kangaroo bond transaction. The forthcoming deal is being marketed at 205 basis points area over semi-quarterly swap and is expected to price on the day after launch. Deutsche Bank, TD Securities and Westpac Institutional Bank are joint lead managers.