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On March 4, KfW Bankengruppe (KfW) (AAA/Aaa/AAA) priced a new, 10-year transaction in the Australian market. According to KangaNews data, the transaction is KfW's second foray into the Kangaroo market in 2016, after a A$500 million (US$364.1 million) five-year line priced at 47 basis points over mid-swap issued on January 13.
Volkswagon Financial Services Australia (VWFS) priced its third Australian asset-backed securitisation (ABS) transaction on March 4, with expected ratings assigned to the Driver Australia Three Trust automotive-backed floating-rate notes on March 1. The transaction has a four-tranche structure, with a total volume of A$531 million (US$391.5 million).
Commonwealth Bank of Australia (CommBank) has priced its first residential mortgage-backed securities (RMBS) transaction of 2016, with expected ratings assigned to the notes – Medallion Trust Series 2016-1 – on March 2.
Issuer and lead managers on AusNet Services (AusNet)'s S$200 million (US$143.4 million) 60.5-year non-call 5.5-year Reg S hybrid, priced on February 29, say the Singapore market met the borrower's cost-of-capital need at the most efficient margin – outperforming other global options.
On March 2, Western Australian Corporation (WATC) (AA+/Aa2) mandated and priced a new, syndicated five-year Australian dollar benchmark floating-rate note (FRN). According to KangaNews data, WATC issued aggregate syndicated volume of A$3.2 billion (US$2.2 billion) in 2015, most recently printing a A$250 million March 2019 FRN in December at 22 basis points over bank bill swap rate.
Credit Suisse Sydney Branch (Credit Suisse Sydney)'s (A/A2/A) new five-year Australian dollar transaction priced on March 2, following a mandate announcement on February 29. According to KangaNews data, the forthcoming transaction will be the bank's first domestic deal of 2016.
On March 2, ASB (AA-/Aa3/AA-) priced a new, self-led March 2019 maturity senior domestic bond. The floating-rate deal is ASB's first domestic benchmark issue since November last year, and the first local senior bond from a big-four New Zealand bank in 2016, according to KangaNews data.
The Reserve Bank of Australia (RBA)'s decision to keep the cash rate on hold – at 2 per cent – at its March 1 meeting drew little surprise from the analyst community. However, views differ around expectations for the RBA's future policy stance. Some believe high hurdles to easing will provide the RBA with little opportunity to lower the cash rate in 2016, while others argue that soft demand and low inflation might cause the RBA to pull the trigger.
On March 1, Westpac Banking Corporation (Westpac) announced the launch of a consent solicitation to amend existing hard-bullet covered bonds to soft-bullet format. Westpac is the second Australian issuer to seek to make this type of amendment after the majority of holders of Commonwealth Bank of Australia (CommBank)'s existing hard-bullet covered bonds approved a request to amend its programme in September last year.
The new five-year transaction mandated by Rabobank Nederland Australia Branch (Rabobank Australia) (A+/Aa2/AA-) on February 25 priced a day later. According to KangaNews data, Rabobank Australia's most recent previous Australian benchmark deal priced in April last year. This A$500 million (US$362 million) long two-year line had an issue margin of 65 basis points over bank bills.
On February 29, Commonwealth Bank of Australia (CommBank) (AA-/Aa2/AA-) revealed plans to engage with investors on a potential RMBS transaction off its Medallion programme. According to KangaNews data, CommBank issued under this programme twice in 2015, each for A$2 billion (US$ 1.4 billion).