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Lead managers say World Bank’s A$500 million (US$393.3 million) August 2028 Kangaroo print on 6 February was largely unaffected by the challenging backdrop which emerged after launch. However, while World Bank’s price and volume held up, renewed volatility is likely to keep other borrowers on pause – aided in part by the active start to the issuance year.
World Bank (AAA/Aaa) launched an indicative A$300 million (US$237.9 million) 10.5-year Kangaroo bond on 5 February. Indicative price guidance for the forthcoming transaction is 42 basis points area over semi-quarterly swap. Pricing is expected on the day after launch, via Deutsche Bank and Nomura.
On 5 February, National Australia Bank (NAB) launched its residential mortgage-backed securities transaction, NRMBS 2018-1. The deal has indicative volume of A$750 million (US$593.3 million) with the potential to upsize to A$2 billion. An indicative A$112.5 million green tranche, class A1-G, is included in the structure.
Westpac Banking Corporation (Westpac) launched an additional tier-one (AT1) capital notes transaction, with indicative volume of A$750 million (US$593.3 million), on 5 February. Price guidance is 320-340 basis points over three-month bank bills, while the offer expected to open on 13 February and close on 6 March.
The rise of marketplace and fintech-led lenders could reshape the landscape of Australian securitisation in the coming years, as new market entrants seek to deliver superior risk pricing. Liberty Financial (Liberty) announced on 31 January that it is acquiring MoneyPlace, and 18-month-old marketplace lender, and Liberty’s Melbourne-based chief executive, James Boyle, talked to KangaNews about what the thinking behind the move.
The final days of January and first days of February were highlighted by significant volumes at 10-year maturities in the sovereign, supranational and agency sector, including a A$360 million (US$288 million) deal for African Development Bank and a A$500 million transaction for Asian Development Bank. Meanwhile, Nordic Investment Bank priced its second Kauri deal for 2018 with a NZ$375 million (US$276.5 million) transaction.
Higher Australian dollar yield has sparked recent growth in long-end Kangaroo deal flow – including a notable increase in transaction volume – market participants tell KangaNews. However, they believe it is too early to say whether more regular benchmark-sized issuance in the long end will establish itself as a consistent market feature.
United Energy Distribution (UED) benefited from ongoing positive credit-market conditions as well as a boost to its own credit profile as it printed the Australian market’s first true-corporate transaction of 2018. Deal sources say demand remains robust but the outlook for supply is less clear.
