The US private placement market has arguably been the first choice for Australasian corporates’ capital-markets funding for many years. At a roundtable KangaNews and MUFG Securities hosted in Miami in January, USPP investors say they are aware that other funding options – including the Australian domestic market – are increasingly able to offer execution certainty, including at extended tenor. But they say USPPs still offer a compelling value proposition – and many Australia and New Zealand borrowers agree.
The US private placement market, known for its reliable liquidity even in periods of volatility, did more than stay open throughout COVID-19. Record volume printed in 2021 even as a normally reliable issuance source, Australasian corporate borrowers, leaned more on domestic funding options. Australian and New Zealand issuers are now drifting back toward USPP issuance.
Air New Zealand says parallels between its credit and that of Qantas helped its debut Australian dollar deal find strong local support as it kicked off the debt side of a major recapitalisation programme announced in March 2022. Familiarity with the Air New Zealand credit provided a good starting point and deal sources say the issuer’s investor engagement and marketing efforts ensured a successful landing.