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 11 November, South Australian Government Financing Authority (SAFA) (AA+/Aa1) launched a syndicated increase to its May 2030 bond. Indicative price guidance for the forthcoming deal is 55-57 basis points area over the 10-year futures contract, equivalent to 54.125-56.125 basis points area over Australian Commonwealth government bond.
Verizon Communications (Verizon) returned to the Australian market for its second Kangaroo deal on 30 October. The transaction was smaller in size than the issuer’s Australian debut but still pushes the boundaries on Australian dollar tenor through the inclusion of a 20-year tranche with benchmark volume which compares with deeper global markets.
On 1 November, South Australian Government Financing Authority (SAFA) (AA+/Aa1) revealed plans for a A$1 billion (US$689.2 million) syndicated tap of its May 2030 select line. The deal is expected to launch in the week beginning 11 November, with ANZ, Deutsche Bank, RBC Capital Markets and Westpac Institutional Bank leading.