Pricing in the Australian dollar supranational, sovereign and agency (SSA) market remains dislocated, intermediaries say, based on lack of alignment between domestic investor and offshore borrower pricing expectations. A number of factors are at play, not least among them the record support SSA borrowers are receiving in global markets.
A cross-section of international investors supported Asian Development Bank’s latest Kangaroo transaction, particularly in the 10-year notes. While Japanese investors participated, wider spreads attracted a more diverse book of Asia-based accounts, according to lead managers.
CPPIB Capital’s second Kangaroo transaction benefited from a strong international bid, with investors flocking to the solid yield and the issuer’s commitment to being a programmatic Australian dollar issuer. The borrower says the domestic bid was also strong as local investors continue to grow comfortable with the Canadian issuer.