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.
Asian Infrastructure Investment Bank took advantage of conducive market conditions and growing Australian dollar demand for sustainable debt to print its long-awaited debut in the Kangaroo market on 28 April. The issuer says an expanded, and fully sustainable, funding programme should support regular Kangaroo issuance.
On 27 April, Asian Infrastructure Investment Bank (AIIB) (AAA/Aaa/AAA) launched an inaugural A$300-500 million (US$233.5-389.2 million), five-year, Kangaroo, sustainable-development bond. Indicative price guidance for the deal is 21-23 basis points area over semi-quarterly swap, equivalent to 30.5-32.5 basis points area over Australian Commonwealth government bond.
Asian Development Bank says its gender-bond Kangaroo is part of its efforts to develop a public-market presence for this type of funding as the projects it is seeking to fund grow. Accelerating gender equality is one of the supranational’s long-term operational priorities and it is increasingly possible to align this goal with funding.
On 23 April, Asian Infrastructure Investment Bank (AIIB) (AAA/Aaa/AAA) mandated Deutsche Bank, J.P. Morgan, Nomura and Westpac Institutional Bank to arrange a global investor call on 26 April regarding a potential inaugural Australian dollar denominated, Kangaroo, sustainable-development bond.