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Australian market participants generally expect only a gradual and marginal impact from the Reserve Bank of Australia (RBA)’s 5 May decision to make certain corporate bonds eligible collateral for open market operations. Even so, the criteria encompass a massive portion of Australian dollar corporate debt and took the market by surprise.
On 7 May, Liberty Funding launched its dual-currency residential mortgage-backed securities (RMBS) deal, Liberty Series 2020-1. The capped total volume for the transaction is A$500 million (US$319.9 million) equivalent, with pricing expected the day after launch. SMBC Nikko is the arranger for the Japanese Yen tranche, while the Australian dollar tranches are arranged by Commonwealth Bank of Australia.
The following interview is with an Australian-based banker working in sustainable finance. It was conducted on 1 May 2020.
On 7 May, expected ratings were assigned by Moody's Investors Service to Liberty Funding's proposed dual-currency residential mortgage-backed securities (RMBS) deal, Liberty Series 2020-1.
On 7 May, Bank of Queensland (BBB+/A3/A-) launched an inaugural five-year, Australian dollar denominated, conditional pass-through (CPT) covered bond transaction. Indicative price guidance for the forthcoming deal, which is expected to price on the day of launch, is 110-115 basis points area over three-month bank bills. ANZ, National Australia Bank and UBS are leading. The notes are expected to be rated Aaa/AAA.
On 6 May, La Trobe Financial began taking indications of interest for its residential mortgage-backed securities (RMBS) deal, La Trobe Financial Capital Markets Trust 2020-1. The transaction is expected to launch in the week beginning 11 April. Macquarie Bank is arranger for the deal, and joint lead manager alongside Citi, Commonwealth Bank of Australia, HSBC, National Australia Bank, Natixis and Wells Fargo Securities.
Late in the Sydney day on 6 May, Rentenbank (AAA/Aaa/AAA) launched a minimum A$100 million (US$64 million) increase to its January 2025 Kangaroo bond. The forthcoming deal has indicative price guidance of 50 basis points area over semi-quarterly swap and 45.75 basis points area over Australian Commonwealth government bond. Pricing is expected on 7 May, according to lead managers J.P. Morgan and TD Securities.
On 6 May, Firstmac launched a residential mortgage-backed securities (RMBS) refinancing deal, Firstmac Series 1-2015 Class A-2R. The indicative tranche volume for the forthcoming transaction, which is expected to price on the day after launch, is A$101 million (US$65 million). ANZ and National Australia Bank are leading.
On 6 May, Woolworths Group (BBB/Baa2) announced plans to hold fixed-income investor calls on 11 May. The issuer is considering either or both a five-year deal and a longer-dated Australian dollar denominated deal. ANZ, Commonwealth Bank of Australia, National Australia Bank and Westpac Institutional Bank have been mandated for the transaction.
The following interview is with an Australian-based corporate treasurer. It was conducted on 1 May 2020.
The following interview is with an Australian-based service provider to the fixed-income market. It was conducted on 30 April 2020.
On 5 May, Bank of Queensland (BBB+/A3/A-) mandated ANZ, National Australia Bank and UBS to arrange an investor call regarding a potential five-year, Australian dollar denominated, conditional pass-through (CPT) covered bond transaction. The notes are expected to be rated Aaa/AAA.