Going into the COVID-19 crisis, the Australian mutual and customer-owned banking sector already faced problems it had been grappling with for years, especially lower-for-longer rates. The industry gathered to discuss funding and capital challenges at a KangaNews event in late February.

KangaNews is proud to present the winners of the institutional and deal categories in the KangaNews Awards 2019. After an extensive voting and verification process, KangaNews can confidently say its results reflect a true market view on the outstanding performers of 2019 in the Australian and New Zealand debt markets.

The nonbank lending sector represents a significant portion of the Australian securitisation market. While the volume and frequency of deals indicates an increasing level of investor comfort with the sector, myths pertaining to nonbanks’ lending practices persist and could inhibit future funding growth.

The Australian Prudential Regulation Authority (APRA) determined on 9 July that Australia’s major banks will need to increase their capital ratios by 3 per cent of risk-weighted assets (RWAs) by 2024 to satisfy total loss-absorbing capacity (TLAC) equivalent requirements. How and where the major banks raise the capital will have ripple effects in the market.

The final form of Australia’s total loss-absorbing capacity (TLAC) regime is as yet unknown. One thing that is beyond doubt, however, is that the domestic investor base will play a meaningful role in funding whatever requirement the banks end up with. The KangaNews Debt Capital Markets Summit 2019 concluded with four key local players sharing views on the prospects.

The Australian Prudential Regulation Authority (APRA) has hinted that its plan for the forthcoming Australian loss-absorbing capacity (ALAC) regime to be funded predominantly via tier-two instruments may not be set in stone. It remains unclear what shape the final regime will take, but more options now appear to be on the table than first thought.

McDonald’s Corporation (McDonald’s) capitalised on rallying market sentiment and a lack of recent corporate Australian dollar issuance to achieve a significant volume and tight pricing in its Kangaroo debut, according to deal participants.

The impending likely demise of global interbank offered rates has sparked many questions for the Australian market. Its local credit reference rate appears to be relatively robust – though its status is not unimpeachable – while the importance of cross-border issuance to Australian borrowers requires engagement with international IBOR developments. KangaNews and Commonwealth Bank of Australia brought together key market participants in late January to discuss the way forward.

The Australian securitisation market is arguably in its best shape since the financial crisis – at least in the sense of the robustness of market infrastructure and diversity of participants on the issuer and investor sides. In November, a record number of delegates gathered in Sydney at Australian Securitisation 2018, the annual conference of the Australian Securitisation Forum, to discuss the state of play – and some of the looming challenges.

KangaNews is proud to present the winners of the institutional and deal categories in the KangaNews Awards 2017. After an extensive voting and verification process, KangaNews can confidently say its results reflect a true market view on the outstanding performers of 2017 in the Australian and New Zealand debt markets.