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On January 23, Rabobank Nederland Australia Branch (Rabobank Australia) (AA-/Aa2/AA-) priced a new five-year benchmark Australian dollar transaction. The senior-unsecured transaction is the first such domestic AUD deal of the year, but follows closely behind Australia's first wholesale-only issue of tier-two bank debt under Basel III rules, which was priced on January 21 by Bendigo and Adelaide Bank.
In the wake of Australia's first wholesale-only issue of tier-two bank debt under Basel III rules, the transaction's issuer and lead managers say increased investor comfort around the new-style securities supported a significant oversubscription and price tightening. Bendigo and Adelaide Bank (BEN) sold A$300 million (US$265.6 million) of tier-two notes with, according to the issuer, a 2.5 times oversubscription.
The size and tenor of the second Dim Sum bond issued by Fonterra Co-operative Group (Fonterra) highlights the significant development in the market in recent years. This development, say intermediaries, means that the market is edging closer to participants being able to access Dim Sum liquidity for global funding purposes.
On January 21, Bendigo and Adelaide Bank (BEN) (A-/A2/A-) priced a new Australian dollar subordinated benchmark 10-year non-call-five floating rate note (FRN) transaction, in the borrower's first deal of 2014. The transaction is also the first-ever Australian bank tier-two deal to be issued under Basel III rules without retail documentation.
On January 21, Kommunalbanken Norway (KBN) (AAA/Aaa) mandated a tap of its July 2024 Kangaroo line in what is the borrower's third visit to the market in 2014. According to KangaNews data, the tap is the first increase of the line which was introduced on January 7 this year with a volume of A$150 million (US$131.5 million) and pricing of 100 basis points over Australian government bond (ACGB).
European rolling-stock agency EUROFIMA (AA+/Aaa) priced a new five-year Kangaroo transaction in what is its first deal in the Australian dollar market since July 2012. EUROFIMA was previously one of the most frequent supranational, sovereign and agency Kangaroo borrowers – it issued A$1.8 billion (US$1.6 billion) in 2005, for instance – but has been much less active since 2008.
The coveted return of L-Bank to Kangaroo issuance highlights the importance of both domestic and international investors in the Australian market, say intermediaries. The deal also emphasises the position of the AUD as a global currency, thereby opening the door for other sectors and countries to consider the market.
Sovereign, supranational and agency (SSA) Kangaroo and Kauri issuance dominated during the week under review. Nordic Investment Bank successfully executed deals in both markets and L-Bank returned to SSA Kangaroo issuance for the first time in almost seven years.
On January 16, Kommunalbanken Norway (KBN) (AAA/Aaa) priced a new Kangaroo bond deal due in January 2019. This is the second new Kangaroo line that KBN has launched in 2014 after it priced a A$150 million (US$132.1 million) curve-extending transaction on January 7.
KfW Bankengruppe (KfW) (AAA/Aaa/AAA) priced its second Kangaroo transaction of 2014 on January 16 – a A$200 million increase to its March 2024 line. According to KangaNews data, the bond – which is KfW's longest-duration Kangaroo – was introduced in a A$300 million (US$267.8 million) deal in September last year and has previously been increased just once, by A$200 million in November last year.