Lead managers say World Bank’s A$500 million (US$393.3 million) August 2028 Kangaroo print on 6 February was largely unaffected by the challenging backdrop which emerged after launch. However, while World Bank’s price and volume held up, renewed volatility is likely to keep other borrowers on pause – aided in part by the active start to the issuance year.
Emirates NBD Bank and First Abu Dhabi Bank (FAB) returned to Australian dollar issuance in February after long absences. Deal sources say market conditions were conducive despite basis-swap headwinds earlier in the year.
A tight cross-currency basis swap at the start of 2020 is limiting the opportunities that usually exist for offshore borrowers in Australian dollars at the start of each year. Traders expect pressures in short- and long-term funding markets to continue to influence the basis, which could pose an ongoing challenge for Kangaroo issuance.
On 20 February, KfW Bankengruppe (KfW) (AAA/Aaa) launched a minimum A$100 million (US$66.8 million) increase to its September 2026 Kangaroo bond. Indicative price guidance for the forthcoming deal is 40 basis points area over semi-quarterly swap, equivalent to 41.75 basis points area over Australian Commonwealth government bond. Pricing is expected on the day of launch, according to Nomura and RBC Capital Markets.