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On November 11, International Finance Corporation (IFC) (AAA/Aaa/AAA) priced a tap to its June 2018 Kangaroo issue. This is the first tap of a A$300 million (US$281.4 million) fixed-rate line which was launched in conjunction with a A$100 million floating-rate note on May 29 this year, at 64.5 basis points over the Australian government bond (ACGB).
Global investors confirm continued interest in the Australian securitisation market, with new sources of asset-backed securities (ABS) joining prime residential mortgage-backed securities (RMBS) on the agenda. Still, concern about risk in the housing market and the knock-on effect of a Chinese slowdown remain.
The regulatory future of securitisation in Australia looks positive following constructive comments on the nature and purpose of the asset class made on November 11 by Charles Littrell, executive general manager at the Australian Prudential Regulation Authority (APRA). Included in his remarks was the confirmation that, subject to certain provisos, Australia will likely get its own master trust regime.
Fortescue Metals Group (Fortescue) has completed the repricing and amendment of its US$5 billion term loan B, reducing the facility's margin by 100 basis points and extending its duration by nearly two years. The facility's new margin is 325 basis points over Libor, and the new terms of the loan allow for a further 50 basis point reduction in the margin if Fortescue achieves a leverage ratio of 2.5 times or less.
Telstra Corporation (Telstra) says its latest domestic benchmark bond issue, which priced for A$500 million (US$473.4 million) on November 8, attracted strong support from domestic and international investors despite its five-year tenor. Australia's corporate bond market has tended to focus on seven-year deals in the second half of 2013 as investors seek higher yield.
The first full week in November saw Australian domestic and Kangaroo deal flow continue at a steady pace. Telstra Corporation priced the most significant deal of the week in what was the firm's first transaction of the year and its second benchmark-sized AUD deal since 2005.
Telstra Corporation (Telstra) (A/A2/A) priced a new five-year Australian dollar transaction on November 8, in what is the firm's first domestic transaction of the year and just its second benchmark-sized AUD deal since 2005. The firm has had a more positive outlook on the Australian dollar market in recent times, having completed its largest-ever deal in the market – for A$750 million (US$714.6 million) – in November 2012.
Two new deals from KfW Bankengruppe (KfW) and Inter-American Development Bank (IADB) priced this week, joining a recent run of supranational, sovereign and agency (SSA) Kangaroo issuance. Market participants say strong demand and a conducive basis swap is keeping deal flow steady, although lower funding requirements and repeat issuance from a number of borrowers will likely keep volume moderate for the rest of 2013.
Liberty Financial (Liberty) has priced its first Australian auto-based asset-backed securities (ABS) transaction of 2013 on November 7. Liberty Series 2013-1 Auto Trust (Liberty 2013-1) has a five-tranche structure with an total volume of A$150 million (US$142.1 million).