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In the wake of the first Reg S-only transaction issued off its newly signed EMTN programme, Lendlease tells KangaNews that execution was based on a desire to widen investor access ahead of future funding needs rather than a one-off judgement on pricing or other factors. Asian Reg S demand is solid, Lendlease's lead managers add, but conducive conditions in competing markets lead them to believe a significant step up in Australian-origin Reg S deal flow is unlikely.
The latest launch of a tier-one securities offer by an Australian major bank means three of the big four are in the market for hybrids at the same time – two domestically and one offshore. National Australia Bank (NAB) announced the latest domestic retail launch on May 31, disclosing plans to print an indicative A$750 million (US$538.7 million) of additional tier-one qualifying securities.
It was a huge week for jumbo corporate Kangaroos in the Australian market, as the Coca-Cola Company priced A$1 billion (US$725.1 million) on June 1 and Apple issued A$1.425 billion on June 3. Meanwhile, L-Bank returned to the Kauri market, printing NZ$125 million (US$85.3 million) of December 2017 notes.
The first Asian bank to issue a covered bond in the Kangaroo market says it sees Australian dollars as one of three currencies on which it will focus covered-bond issuance going forward. DBS Bank (DBS) has a strong deposit-funding base and consequently a limited call on wholesale markets, but it says Australian issuance is a logical component of its programme and expects more to come in both covered and senior-unsecured format.
Lack of deal flow, new protocols around pre-deal disclosure, single-name exposure limits and execution risk: all factors that Australia's latest corporate issuer and its lead managers insist are categorically not barriers to large, cost-effective domestic deals. Port of Brisbane printed A$250 million (US$179.3 million) of new seven-year paper with an oversubscription of more than two times.
A highlight of the week was Westpac Banking Corporation (Westpac)'s debut in the green-bond market. Westpac added a A$500 million (US$361.2 million) green-bond tranche to its latest five-year benchmark becoming the first issuer in Australia to include a green tranche alongside non-green notes. Meanwhile, Port of Brisbane became the first triple-B corporate issuer of the year.
Bank of China Sydney Branch (BoC Sydney) (A/A1/A) priced a new, A$500 million (US$360.9 million) three-year, senior-unsecured transaction on May 27. According to KangaNews data, BoC Sydney was most recently in the Australian domestic market in March 2015 when it priced A$1.4 billion of three-year notes. That transaction priced at 125 basis points over semi-quarterly swap and 125 basis points over bank bill swap rate respectively.
On May 27, Export Development Canada (EDC) (AAA/Aaa) priced a new, five-year benchmark Kangaroo transaction. According to KangaNews data, EDC most recently issued into the Australian market in May 2015. That four-year transaction was for volume of A$350 million (US$251.5 million) and pricing of 22 basis points over semi-quarterly swap.
On May 26, QPH Finance (BBB) – the financing arm of Port of Brisbane – launched and priced a new, seven-year transaction in the Australian market. Volume was A$250 million (US$179.9 million), from A$200 million at launch, and the deal priced at 180 basis points over semi-quarterly swap or 5 basis points inside its indicative level.
On May 26, CML Group (CML) (NR) priced a A$15 million (US$11 million) "retap" to its existing corporate bond facilities. The offer was made on the same terms as the A$25 million six-year issue placed by CML in March, with the senior-secured fixed-rate notes paying a fixed coupon of 8 per cent.