While that may have been characterised as boring, it feels like the boring stopped very quickly in the final quarter as the market began to focus on trade wars and global macroeconomic headwinds again. This quickly fed through to a softer credit market.

In the new year, although markets stabilised we got the sense that rates were going to continue grinding lower and we felt, on the whole, that this was going to be positive for credit as investors started to seek out yield again. But credit markets bounced back far more quickly than we expected.

We weren’t planning to issue quite so early in the year. But the strength of demand we were seeing in March was compelling, which was reflected in the really strong result we achieved with our Eurobond issue.

I think demand for credit will continue to be strong throughout the rest of the current year, although it is likely to be punctuated with the bouts of volatility to which we have started to become accustomed. This provides a positive backdrop for corporate issuance.

On the other hand, issuance conditions globally have been patchy from market to market. The euro market has been very strong this year, Asia and the US less so.

There seems to have been some change in which specific markets are favoured. But there are plenty of options if you’re diversified enough in your funding programme. Spreads and rates are certainly favourable for borrowers.

Volatility continues to make headlines, but it always seems to be short-lived at the moment. One day there is a trade war and another day Brexit is the focus – but the next day markets are back open for business.

We are keeping a close eye on windows of opportunity, as always. We are ready to go and our documentation is updated on a regular basis. This means we can listen to the investor base and are able to avoid volatile periods.

Because of the volatility we had last year, valuations were appealing at the start of 2019. The reaction of central banks has also helped propel the strong market since the beginning of the year.

There has been noise from the trade war and other risk events. But the effect of these events has been short-lived in the primary market.

Equity markets probably had the best first half they have had in a very long time as well. This is quite rare, because equity and bond markets typically move in different directions. This year, equity-market pricing has been very optimistic about a recovery while the credit market is pricing in lower inflation. This is only sustainable if growth remains low and central banks remain dovish.

A lot of the market noise this year has been based on expectations about central-bank activity. Whenever there is a discrepancy between expectation and the reality of what the central banks actually do we tend to see a lot more volatility and uncertainty.

The bottom line is that the market has been in very good shape for debt issuance this year. Historically low rates and very tight credit spreads make a great issuance environment.

Historically, investment-grade credit performance is largely about central-bank easing or tightening – this is the biggest factor that influences the market. Meanwhile, high-yield credit in the US is relatively underperforming because there is a question mark around growth – but at the same time equities are still doing well. There is a dichotomy.

Markets will do well as long as central-bank easing is on the table. Our house view is that the European Central Bank (ECB) will continue to ease and this will be supportive of corporate credit. The big question everyone is asking themselves is whether we are seeing the ‘Japanification’ of markets. With the Fed looking to cut as well, we can see how conceivably markets could get to a situation like Japan.

This time around that was not our experience at all, which was a pleasant surprise. Perhaps this was just a reflection of how investors were viewing their home markets at that point in time. Regardless, we received a lot of unsolicited, positive feedback following our investor update. We were able to act on this quickly, despite initially not having planned to bring a transaction straight away.

However, I don’t think this is an actual change to the execution process. Being able to take advantage of opportunities quickly, or adjust plans according to changes in market conditions whatever the cause, is part of how we have always accessed markets.

Whether we opt to open a book sometimes comes down to the type of issuer and transaction. If there is good feedback from a roadshow and it is an investment-grade name, there is usually good certainty unless it is a really bad day. For other issuers, and especially if there is more fast money involved, it can be different and we need to be more careful.

We were very happy with the Reg S market when we issued. We had a very good reception in Asia where the investors understood our credit and the products that we move on rail. This certainly helps.

Since we issued, the Reg S market has been choppy and credit spreads have blown out. At the moment, Reg S probably doesn’t stack up weighed against other funding options. We will continue to monitor this and other markets as we potentially look to issue in the next year. But we probably would not have gone to the Reg S market in the last 12 months had we needed to issue.

One of the characteristics of the Asian investor base is that ‘yieldy’ products tend to get a very good bid and the market can therefore offer a decent arbitrage. Longer tenor or higher yielding can be where the Asian bid comes in.

This is why we see a lot of longer-dated transactions and subordinated structures go well in Asia. Banks and corporate hybrids get a very good bid from the region.

Australian issuers are typically very high quality and are possibly looking for diverse pockets of liquidity. At the same time, Asian investors are looking for diversification a lot more because there has been significant growth in Chinese issuance within the APAC issuer base in the last few years. Going back 15 years, there were only three Chinese issuers which were probably 3 per cent of the market. Now, they are about 70 per cent of the APAC market.

This is relevant for Australian issuers. International money is now buying Chinese credit because it has become too large to ignore. This means international investors are shifting research centres and portfolio managers to Hong Kong and Singapore, which in turn means big US investors can place bids from the Asian or the US time zone.

We are also seeing Chinese investors, which until now have been very concentrated in Chinese credit, begin to look for diversification in higher-quality names. Wealth is shifting from west to east and money needs to be put somewhere safe – particularly pension-fund, insurance and bank money. This is where Australian issuers fit in very well.

We have seen some issuers opening books in Asia in order to give investors in the region a better chance to be involved in deals. This typically leads to the book being fully subscribed by the time the US opens – Asian demand is strong enough to cover the whole book.

When US investors start their day the first thing they will ask about is the status of the Asian book. They want to see a strong Asian bid to be convinced to participate. This brings up another element, which is how Asian investor allocations are determined. US-based syndicates typically run 144A format deals and, without a conscious effort from the borrower, Asian investors almost inevitably do not get much allocation.

I get the sense that these accounts are already starting to hit limits for the issuers they see regularly. In addition, if they begin to get uncomfortable around China they don’t have too many other options within investment-grade Asia. There are only so many deals that come out of other investment-grade markets such as Malaysia or Thailand. It is refreshing for investors to be offered high-quality Australian names – in fact, in some ways it is the sweet spot.

These investment firms now often have analysts in the region that can call a company in their timezone to get to understand the credit. It feels like we are already at the cusp of issuers being able to do Reg-S-only – it could well be the norm within five years.

This includes looking at the US dollar Reg S market quite closely. Our analysis suggests that it is still a relatively small market compared with euros or 144A, though – both with regard to the size of the market overall and the size of tickets investors can write.

I think the fact that volatility in the Reg S market has seen its viability come and go supports this conclusion. We are not a frequent issuer. But our issuance has largely aligned with our M&A activity and the volume of this activity tends to mean that we want to be active in large, deep markets where we can build close relationships with regular investors. Purely from this perspective, we find that euros and 144A are the markets to favour.

Having said this, I should emphasise that we gave Asian-based investors the first opportunity to participate in our most recent euro and 144A deals – given Asian support for our credit and the strength of the Asian market.

Reg S is a good option for corporate issuers especially in the context of deal size. The 144A market’s benchmark volume is US$500 million; in the Reg S market it is US$300 million. The option of Reg S makes sense for issuers with a lower funding need than the 144A market requires. However, to access this issuers need to have the Asian investor base ready.

We run many Korean transactions. In the past, we announced these in the US first and let them run overnight – which meant a 48-hour, rather than a 24-hour, bookbuild. We have done it this way because issuers have considered the US to be more important and as a result haven’t taken into account the fact that these US investors may have offices in Hong Kong or Singapore.

Nowadays, any transaction of this type is executed over a 24-hour period. It opens in Asia and final price guidance has to be out during Asian hours – because the decision-maker is Asia-based. This means Asia has become more important and Asian syndicates are running these transactions.

There is another element to this. Where the best liquidity in the secondary market tends to be is where the portfolio managers and research are based. A lot of trading activities are shifting from US to Asian hours and as a result these funds will decide to base their portfolio managers in Asia.

The maturity available in euro issuance is lengthening. Transurban’s most recent euro deal was for 15 years – and there is a deep pool of liquidity between 10- and 20-year duration available in Europe nowadays. The problems for Australian issuers are the swap cost of issuing at that tenor and clean credit lines. Having said this, euro basis-swap costs are negligible. This is another reason why euro issuance is competitive.

On deal size, we have not seen much sub-benchmark supply in the euro market this year. It takes a very strong market backdrop to execute in sub-benchmark volume and not have to pay for it.

Further corporate-sector purchase programme injections in Europe will benefit corporate issuers. Australian issuers will not be eligible, though they should benefit indirectly as spreads across the market compress.

Funds under management with USPP investors are growing. Their market is very much relationship-driven and we receive reverse enquiry from some fund managers.

I get the sense that USPP investors have amendment fatigue as several Australian borrowers have recently gone through the process. Amendment processes are certainly a negotiation, with preparedness to pay additional fees balancing the value of aligning documentation – all while being mindful of not burning relationship bridges.

Internally, our mantra has been to set business cases for green initiatives and support them wholeheartedly. However, a green bond itself is restrictive in volume and there are additional requirements across the business for a small treasury team. We also have to engage further third parties, such as Sustainalytics, and see how they respond to our initiatives and assets.

There will eventually be a much more mature sustainable-debt market with uniform rules and methodology, as opposed to what it is now – where participants appear to develop their own criteria and guidelines.

The way we think about it is the things we do on a sustainability front are things all corporates should be doing, and they should be willing and able to explain these to stakeholders. How corporates fund themselves should be a separate issue, though. When sustainability-type funding gets to a point where it offers tangible advantages – and it might not just be pricing or liquidity, but reputational and publicity advantages – there may be a case for it.

It is a rapidly developing market and we are seeing more and more investors mandating a certain percentage of their funds to go into sustainable financing. When this becomes a groundswell it will probably be a market that can’t be ignored.

There are also additional ongoing audit and compliance costs. Green bank loans are more palatable because they can be repaid at any time without penalty.

However, there is no fundamental reason why the same principles could not apply in the bond market, in other words offering a tangible benefit for positive transition. I do not see why these bonds cannot offer a performance aspect, and if they do it will be a good development that would also help to make sure the environmental benefit is properly represented.