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Moody’s Investors Service (Moody’s) and Standard & Poor’s (S&P) have both confirmed they will assign a triple-A rating to issuance covered by the Australian government guarantee, paving the way to an anticipated return to the international markets of one or more Australian bank issuers in the coming days.
Last week a number of intermediaries caused a firestorm in Europe when they tried to unilaterally increase fees for supranational, sovereign and agency (SSA) issuers, based on changing business conditions for lead managers and new fees being paid by government-guaranteed banks which have entered the triple-A space.
Intermediaries acknowledge that the window for hybrid deals in Australia has in all likelihood closed for the year with several potential deals not now expected to come to market, but hope remains that 2009 will offer opportunities for both on- and offshore issuers in the tier one (T1) space.
Rating agencies say there is still insufficient information to determine whether debt issued with an Australian government guarantee will receive rating equality with the sovereign. The issue has come into focus since Standard & Poor’s (S&P) said debt from US issuers under that country’s guarantee will not be rated triple-A.
New South Wales Treasury Corporation (TCorp) says its funding requirement for the 2008/9 financial year will increase to A$5.3 billion (US$3.56 billion), from the previous expected level of A$4.9 billion , following the November 11 mini budget proposed by the state of New South Wales (NSW).