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On February 2 Investec Bank (Australia) Limited (Investec) (Baa1/BBB) priced A$400 million of three-year fixed and floating rate notes (FRNs) guaranteed by the Australian sovereign. This is the first time the issuer has been present in the Australian bond market since it priced three- and five-year vanilla bonds in June 2007.
In the first KangaNews league tables for 2009 UBS has taken a commanding lead over the field in volume of transactions excluding self-led deals, with its figure of A$2.05 billion (US$1.32 billion). The Swiss bank’s highlights include acting as joint lead manager on ANZ Banking Group (ANZ)’s A$2.6 billion 2014 benchmark and Bank of Queensland’s A$500 million 2011 trade.

The retail deal pipeline remains strong in New Zealand at the start of 2009 with market participants anticipating strong demand for the transaction Fonterra (A+/AA-) announced at the end of last year and a number of additional deals in the offing, including a possible return to the hybrid market by Bank of New Zealand (AA/Aa2) (BNZ).

The flood of government-guaranteed issuance from Australian banks has slowed in recent days, with just under US$1 billion equivalent priced in the week ending January 23 – down from US$5.08 billion the week before and US$12.41 billion in the first week of the new year.

TD Securities (TD) will no longer have an origination, sales or trading facility in Sydney as the bank has revealed all these functions will be moved to Singapore "in the coming weeks". The firm has yet to confirm details of staffing changes or how the new setup will be structured, but market sources have cast doubt in its ability to maintain its origination performance in Australia with no local facility.

Demand for Australian government guaranteed bonds continued on January 20 as Bank of Queensland (BBB+/A2/BBB) (BOQ) became the first triple-B rated issuer to price a deal under the sovereign scheme, bringing A$500 million (US$331.15 million) of 2011 paper to its home market.

Australian banks had by January 14 conducted the equivalent of over US$30 billion in term borrowing under the conditions of their government's guarantee scheme since the first such deals were brought to market in early December 2008.

Westpac Institutional Bank (Westpac)’s strategic decision to separate its rates and credit operations has led to a number of changes in its credit trading business in Australia, New Zealand and the UK, including a brace of new hires.

The Australian government guarantee scheme came into effect on November 28 2008. Australian banks started issuing with government guarantees onDecember 8 2008.
By the end of the scheme on March 31 2010 the amount of long-term debt issued by Australian banks under the guarantee scheme amounts to the equivalent of over US$130 billion at current exchange rates.
The main currency of issuance has been USD, with over US$61.9 billion issued. This is followed by AUD, with A$56 billion issued - predominantly in the domestic Australian market. The third-biggest issuance currency is Yen, with US$14.1 billion equivalent issued in the euro-yen and Samurai bond markets.
Below is the final tally of government-guaranteed deals from Australian banks, gleaned from KangaNews contacts as well as the Australian government's website on guaranteed liabilities.


ANZ Banking Group (ANZ) closed a busy week for Australia's biggest bank borrowers with a A$3.25 billion (US$2.3 billion) domestic transaction on January 9. With both National Australia Bank (NAB) and Commonwealth Bank of Australia (CommBank) issuing large US dollar transactions in the same week, Westpac Banking Corporation (Westpac) is now the only big four Australian bank not to have issued both on- and offshore under government guarantee.

Royal Bank of Scotland Australia Branch (AA-/Aa1/AA-) (RBS) became the first issuer with a non-Australian parent to bring a bond transaction covered by the Australian government guarantee with one of the three tranches it priced on December 19.

Two of New Zealand’s local councils, Dunedin City Treasury (AA-) (Dunedin) and Greater Wellington Regional Council (AA-) (Wellington), have priced transactions off wholesale documentation, but retail demand continues to be the main driver of corporate deals in New Zealand with Fonterra (A+/AA-) the latest to announce a deal aimed at that buyer base.