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Australia’s government-sector issuers say their local real-money investor base was a key provider of funds in 2018. As market conditions shift once more, opinions about sector outlook vary within this newly re-energised buyer base.
On 14 February, European Investment Bank (EIB) (AAA/Aaa/AAA) launched a minimum A$200 million (US$141.7 million) increase to its August 2026 Kangaroo bond. The forthcoming deal is being marketed at 48 basis points area over semi-quarterly swap, equivalent to 60.75 basis points area over Australian Commonwealth government bond. Pricing is expected on the day of launch, according to lead managers RBC Capital Markets and TD Securities.
In January 2019, KangaNews invited representatives of New Zealand’s major government-sector funders to a roundtable discussion in Wellington. The discussion covered all the factors most relevant to these issuers in today’s market – including the global funding environment, supply-and-demand dynamics and the future of New Zealand sustainability financing.
On 14 February, Mizuho Bank Sydney Branch (Mizuho Sydney) (A/A1) launched a new, Australian dollar denominated three-year floating-rate note (FRN) transferrable certificate of deposit. The forthcoming deal has indicative price guidance of 91-96 basis points over three-month bank bills.
On 14 February, Pepper Group (Pepper) began taking indications of interest for a capped A$750 million (US$531.8 million) equivalent residential mortgage-backed securities (RMBS) transaction, PRS 23. The deal will include a US dollar denominated tranche and a euro denominated tranche backed by green mortgages.
On 13 February, National Australia Bank (NAB) (AA-/Aa3) launched a new, five-year benchmark domestic deal. The self-led transaction is being marketed at 105 basis points area over swap benchmarks. Pricing is expected on the day after launch.
On 13 February, General Motors Financial Company (General Motors) (BBB/Baa3/BBB) launched a four-year, inaugural Kangaroo bond transaction. The forthcoming deal is being marketed at 205 basis points area over semi-quarterly swap and is expected to price on the day after launch. Deutsche Bank, TD Securities and Westpac Institutional Bank are joint lead managers.
On 13 February, KfW Bankengruppe (KfW) (AAA/Aaa/AAA) launched a minimum A$200 million (US$142 million) increase to its February 2022 Kangaroo bond. The forthcoming deal has indicative price guidance of 37 basis points area over semi-quarterly swap and 45.75 basis points area over Australian Commonwealth government bond. Pricing is expected in the near future, according to lead manager Nomura.
On 13 February, Mizuho Bank Sydney Branch (Mizuho Sydney) (A/A1) began taking indications of interest for a potential Australian dollar denominated three-year transferrable certificate of deposit. The possible deal has initial price guidance in the area of 98 basis points over swap benchmarks, with launch expected in the near future. ANZ, Commonwealth Bank of Australia, Mizuho Securities and Westpac Institutional Bank are joint bookrunners.
The start of 2019 marks an interesting juncture for Australia’s government-sector borrowers, characterised by falling sovereign issuance, heightened market volatility and the emergence of sustainable debt as a regular funding option. KangaNews gathered the market’s key players at a roundtable discussion in Sydney to exchange views on the outlook.