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• A question of scale

  Momentum behind the private-debt market is growing as investors widen their search for higher-yielding assets within credit allocations. Specialists in Australia say developments are leading their sector closer to the robust markets developed in the US and Europe after the financial crisis, including more transparent valuation and liquidity.

• Activity review: on the road to recovery

  Lack of senior-unsecured supply from the major banks continues to represent a major hole in the Australian debt market, according to KangaNews issuance data from the first half of 2021. Meanwhile, sovereign and semi-government issuance has receded from the heights of last year.

• Australian inflation market paints a complex picture

  Inflation signs are emerging faster and more frequently in other global jurisdictions, but there is enough inflation smoke in Australia for market users  to be contemplating the fire. When it comes to inflation-linked bond issuance, local experts say the market story is not as simple as more interest equating directly to demand for, or supply of, physical product.

• BNPL asset class flies high with Zip triple-A upgrade

  Australia’s buy-now, pay-later securitisation sector received a significant stamp of approval in July as Moody’s Investors Service upgraded the top tranches of all three of Zip Co’s outstanding transactions to Aaa. The rating agency had previously withheld the top mark based on the relative infancy of Zip and the BNPL asset class, and the issuer now says it hopes to see a cost-of-funds benefit from the development.

• Darkest before dawn

  With roughly half its population in lockdowns that look set to stay in place for months to come, it is increasingly clear in mid-August 2021 that Australia’s relatively comfortable experience with COVID-19 in 2020 is very much a thing of the past. New Zealand may be heading in the same direction. In this depressing time, it is important to focus on how we reach a better future.

• Green RMBS takes root

  In June, Firstmac issued Australia’s first solely green residential mortgage-backed securities deal. The local market has seen consistent though small-scale green securitisation of nonmortgage assets. Market participants are now somewhat optimistic about more supply in the mortgage space.

• Holding pattern

  Inflation speculation has intensified in 2021 as the world slowly emerges from the COVID-19 pandemic. Even so, investors in the world’s major inflation-linked-bond markets are in a holding pattern amid a mid-year rates rally based on renewed economic scepticism. The big question for markets is what might break the deadlock on inflation outlook.

• Learn, develop, adjust – an evolutionary approach to ESG

  Sustainable finance continues to gather momentum in 2021, with record labelled issuance and ‘greeniums’ developing into the norm for pricing these instruments. A recent thesis questions the efficacy of such developments, however – instead calling for a sustainable-finance market that considers entities as a whole rather than their individual assets.

• Libor transition: crunch time

  Differing levels of progress across global jurisdictions toward the end goal of LIBOR cessation demonstrates both that a successful transition is possible and that pitfalls await for those that do not move swiftly enough. There are lessons for Australia and New Zealand in how international markets have adapted to benchmark change.

• Now or never

  Australia’s move toward a net-zero emissions future is accelerating, even in the absence of decisive federal policy leadership. Participants at the KangaNews Sustainable Debt Summit 2021 virtual event in June discussed the opportunities of a net-zero future and the risks of being left behind.

• Securitisation market sets in for another deal surge

  The Australian securitisation market is in the middle of another issuance deluge. Similar to the last concentration of deals, in March and April, a variety of issuers report strong demand producing record transaction volume and pricing. There is also more supply on the immediate horizon.

• Sustainable finance eyes ambition and amplification

  Discussions at the KangaNews Sustainable Debt Summit 2021 virtual event in June suggest market engagement with environmental, social and governance issues continues to deepen. Norms in sustainability-linked instruments are quickly solidifying while developments in accounting, disclosure and stakeholder engagement are also contributing to momentum.

• Up to date with global sustainable debt

  A central panel at the KangaNews Sustainable Debt Summit 2021 brought together sustainable-finance leaders from the event’s four headline sponsors to share intelligence on the latest developments across the global market. They discussed the most topical international thinking on market evolution, uptake and impact.