The international bank debt-issuance market is constantly evolving, with the emergence of total loss-absorbing capacity (TLAC) and renewed volatility among 2018’s most notable developments. KangaNews speaks to funding executives from Asia, Australia, Europe, Japan and North America to get the latest on market conditions and outlook.
Australia’s big-four banks could triple their issuance of tier-two instruments to meet the local equivalent of a total loss-absorbing capacity (TLAC) regime, according to the Australian Prudential Regulation Authority (APRA).
There is no Australian equivalent of a total loss-absorbing capacity (TLAC) regime, and even when one is implemented it does not currently appear that it will create a new type of additional-capital security as has been the case in most global jurisdictions. This has not stopped international banks issuing TLAC-compliant senior debt denominated in Australian dollars.
Canadian banks have been a reliable source of supply to the Australian dollar market since the financial crisis, initially focused mainly on covered bonds but increasingly in recent years in senior-unsecured format. The Australian market has proved fruitful for Canadian issuers both via local branches and in Kangaroo format.