European Investment Bank
Market conditions in Australia have become harder in 2018 across all sectors, and arguably more so for supranational, sovereign and agency (SSA) issuers given cross-currency basis-swap economics. Borrowers say demand is down, but they remain firmly committed to the Kangaroo and Kauri markets and have found plenty of opportunities to fund.
Scaling up and broadening supply through globally harmonised issuance standards will be a key goal for the international green-bond industry in the coming years, according to market participants at the leading international forum for the sector. Asia’s significance as a source and target of issuance is only set to grow.
After a prolific start to 2018, long-end Kangaroo issuance from supranational, sovereign and agency (SSA) issuers has tailed off significantly in recent months, with sizeable transactional volumes seen through the first months of the year reverting back to the small- and medium-sized deals which have previously characterised the market. European Investment Bank (EIB)’s recent deal bucks this trend.
European Investment Bank (EIB) (AAA/Aaa/AAA) launched a new, May 2029-maturity, Kangaroo bond on 7 June. The forthcoming deal will have minimum volume of A$200 million (US$153.1 million) and is being marketed at 45 basis points area over semi-quarterly swap, equivalent to 52.5 basis points area over Australian Commonwealth government bond. Pricing is expected on the same day as launch, via TD Securities.