The year that was: 2023 in review

Australasian primary issuance navigated a range of market conditions in 2023. To reflect on the year that was, KangaNews is publishing a series of annual reviews across a variety of sectors in the Australian and New Zealand domestic markets.

As market participants settle back at their desks to begin a new year, KangaNews is taking the chance to reflect on the last 12 months through a series of reviews on key market sectors.

Each day, this page will be updated with a new article in the seven-part series. The first piece looks at the Kangaroo supranational, sovereign and agency market in 2023.

Over the next week, KangaNews will publish similar reviews covering financial institution issuance, the sovereign and semi-government sector, New Zealand's domestic market, Australian corporate issuance, Kauri issuance, New Zealand corporate issuance in Australian dollars, and the Australian securitisation market.

2023 in review

SSA Kangaroos happy to supply demand boom in 2023

Changing market conditions caused the supranational, sovereign and agency sector to supply more volume to the Australian dollar market in 2023 than it ever has before. Despite typical seasonal issuance patterns, demand remained robust throughout the year – including for newer names – and raised expectations for the sector’s development in 2024.

Article 1/7

Article 2/7

Bank issuance in 2023 speaks to Australian dollar capacity growth

After back-to-back record issuance years, it is clear that increased capacity for Australian dollar financial institution bonds is not just a post-pandemic rebound but representative of at least some degree of system growth. A raft of domestic and international banks benefited in 2023, including finding ample liquidity across the capital stack.

Fundamentals outweigh market challenges for Australian sovereign sector

Australia’s sovereign and semi-government issuance market rode the waves of ongoing rates market upheaval in 2023, with issuers reporting solid demand despite myriad challenges. The sector appears to be in fundamentally good health, with semi-government issuers noting growing liquidity in their part of the market on the back of several years of elevated supply.

Article 3/7

Article 4/7

New Zealand market stays on board amid choppy 2023 waters

New Zealand’s capital market faced several headwinds in 2023 but managed to navigate a course to issuance consistent with recent years. A late year regulatory update could suggest smoother sailing ahead for at least one key sector, though deal flow from 2023 provides few hints at a radical change in supply or demand patterns.

Corporates slow to restock domestic market in 2023

Australian dollar corporate supply in 2023 was hampered by uncertainty amid a higher interest-rate environment and a lack of immediate funding need. This caused some issuers to hold off entirely, while others accessed more competitive offshore capital markets. But by year-end, early signs pointed to a more active 2024.

Article 5/7

Article 6/7

New Zealand Kangaroos hop to Australian shores

Deals from New Zealand issuers in the Australian market revved up in a big way in 2023. There are a raft of reasons why the Kangaroo market should remain attractive to opportunistic New Zealand borrowers into 2024 – provided market fundamentals, including basis swap dynamics, are supportive.

Australian securitisation defies gravity to register a record volume year

The Australian securitisation market enjoyed a rebound year in 2023, printing record volume including an unprecedented level of collateral diversity and a notable uptick in bank issuance. It is not all plain sailing in the nonbank lender space, but origination conditions and the funding side appear to be improving.

Article 7/7