TE PAA The last 12 months have been quite interesting for New Zealand. Our reserve bank cut rates by 50 basis points early in 2019, which was a bit shocking to the whole market.

This created some volatility initially but I think it has helped stabilise the market. The expectation was for a couple more rate cuts this year but this has been revised to an expectation of just one rate cut. I think we will see more stability as a result.

The interesting thing now is that the RBNZ [Reserve Bank of New Zealand] has more stringent capital requirements for domestic banks. This will change pricing for the domestic banks significantly and potentially create opportunities for foreign banks in New Zealand.

We’re not quite sure what will happen with regard to availability of credit. Hopefully it will continue, as we have funding requirements. But we believe the USPP market will be available to us, particularly given our requirements for capital over time.

This sort of development is one reason we constantly check and compare available markets. Because we have funding coming up, the US election is a consideration.

Coming to the USPP market might affect the timing of any transaction, as investors might put a hold on what they are doing. Timing will be an important consideration this year.

VAN DER GEEST Australia has had low inflation, wage growth and GDP growth for a little while. The Reserve Bank of Australia has undertaken a series of rate cuts and it has not ruled out the possibility of QE. The expectation is that we are in a lower-for-longer trend.

At the current juncture, we have attractive, low credit spreads. A lot of borrowers are looking at whether they can bring forward funding plans.

Melbourne Airport monitors all markets and relative pricing points, and the swapped-back cost of funds. We consider each market, funding and investor diversity as well as the macro environment from a volatility viewpoint around execution certainty.

Markets are adapting to the geopolitical landscape. But each volatility event we have seen seems to have a limited, short-term impact, with markets carrying on regardless. The question is whether a black-swan event that changes credit sentiment is out there on the horizon.

CROSSLEY Credit spreads have been pretty low for quite some time, despite lower absolute interest rates. The relationship between yields and credit spreads has changed, though: previously credit spreads increased when yields rallied. This hasn’t happened in recent history.

I’m interested to hear the investors’ view about whether this is a new norm. With rates so low, credit spread is a much bigger component. Is this the reason spreads have remained tight or is it just the weight of money?

BELLO Well, we have become used to the low interest-rate environment by now and, unfortunately, nothing suggests rates will change anytime soon. We always have money to put to work so I would like to say to the Australian issuers: please, keep coming to our market.

KIM I think we need to look generally at public markets. The US is in a low-rate, low-spread environment. This is the reality – but we invest through the cycle, not with the cycle. We all have very diverse portfolios.

At the same time, we are averaging over many years. While one can be focused on yield, it’s hard to fight the power of the market at the moment. As long as we are appropriately compensated per our benchmark, that’s how we should think about the market.

Unfortunately, unless something dramatically changes, I think rates will remain low. I agree with Alice Van Der Geest’s point that it sounds like there is a lot of economic pressure to continue growth, which means easing and rates staying low.

I’d be curious to hear how issuers are choosing to look at the USPP market – whether it’s competitive relative to the alternatives.

Right after the rate cuts in 2019, deals seemed to drop off. We usually see strong issuance trends in the first part of the year in the Australian market. Will this be the case for 2020?

VAN DER GEEST All markets are performing well, be it euros, Australian dollars or USPP. We focus on funding diversity, managing our maturity profile and balancing investor diversity.

This makes the USPP market attractive. We can issue multiple tranches to fill the gaps in our curve and make longer-dated deals. We love that we can get Australian dollars from the USPP market. But there will definitely be some competition from other markets.

Australian investors are fighting for assets because there has been a lack of deals. It is pleasing to see the breadth and size of order books and spreads narrowing from initial price guidance. We will have to see how this plays out.

VAN DER GEEST It’s all about capex.

TE PAA We revised our strategy two years ago so we’re on a capex plan now. We may consider further expenditure when we come off this current capex programme. But we are on a five-year cycle and we are only a year and three-quarters into the plan at the moment.

CHAN What about the natural disasters in Australia? Are bushfires in particular something investors should focus on?

CROSSLEY Most of the bushfires are in the national parks and there aren’t many assets in those areas. The fires have been devastating but there has been little effect on most infrastructure businesses.

Powercor is in the western part of the state of Victoria and the recent large fires were in the eastern part of the state. We have very big vegetation-management programmes and we are constantly investing to make sure we try to reduce the impact of bushfires.