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Green bonds make up more than three-quarters of Australia’s impact-investment asset class by dollar volume, according to a report published by Responsible Investment Association Australasia (RIAA). The report suggests that, at A$5.8 billion (US$4.3 billion) of committed funds, impact investment remains a niche market in Australia – but one that has experienced exponential growth.
On 27 July, Inter-American Development Bank (IADB) (AAA/Aaa) launched a minimum A$25 million (US$18.4 million) increase to its June 2029 Kangaroo bond. The forthcoming deal is being marketed at 41 basis points area over semi-quarterly swap and 53.25 basis points area over Australian Commonwealth government bond. Pricing is expected on the day of launch, according to lead managers Nomura and RBC Capital Markets.
On 26 July, Quartz Finance, an entity owned by Blackstone Group (Blackstone), appointed National Australia Bank to co-ordinate the purchase of Investa Office Fund (IOF)’s A$150 million (US$111.6 million) green-bond line which had been set to mature in April 2024. The purchase of the notes is subject to the finalisation of Blackstone’s acquisition of IOF.
ME Bank began taking indications of interest for its residential mortgage-backed securities (RMBS) transaction, SMHL 2018-2, on 25 July. The deal, which has indicative total volume of A$500 million (US$370.5 million), may launch as early as the week beginning 30 July.
On 24 July, S&P Global Ratings assigned preliminary ratings for five classes of ME Bank's residential mortgage-backed securities (RMBS) transaction, SMHL Series Securitisation Fund 2018-2 (SMHL 2018-2). Moody's Investors Service assigned its provisional rating to the Class A notes of the deal on 23 July. The transaction has indicative total volume of A$500 million (US$368.8 million).
Late in the Sydney day on 23 July, KfW Bankengruppe (KfW) (AAA/Aaa) launched a minimum A$100 million (US$73.8 million) increase to its March 2028 Kangaroo bond. Indicative price guidance for the forthcoming deal is 38 basis points area over semi-quarterly swap, equivalent to 45.5 basis points area over Australian Commonwealth government bond. Pricing is expected on 24 July, according to lead manager TD Securities.
Benchmark financial institution (FI) issuance returned to the Australian domestic market in July, with a total of A$3.9 billion (US$2.9 billion) printed across a trio of public three-year deals. With market volatility limiting FI issuance in preceding weeks, deal sources say a build up in investor cash as well as issuer willingness to execute at investors’ preferred tenor drove the transactions.
On 23 July, Pepper Group (Pepper) launched its nonconforming and prime residential mortgage-backed securities (RMBS) transaction, PRS 21. The deal has an indicative total volume of A$700 million (US$519.6 million) equivalent, including the US dollar denominated Class A1-u notes. Pricing is expected on or before 27 July.