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The Reserve Bank of Australia (RBA)'s September 3 decision to leave cash rates unchanged at 2.5 per cent did not come as a surprise to economists. The accompanying statement was also unsurprising with most post-meeting discussion centring on the lack of explicit forward guidance. Some analysts say the RBA had little choice but to leave rates on hold, with global key event risk looming and a rate cut only last month.

Wesfarmers says its recent domestic deal secured on properties leased by the firm to its subsidiary, Bunnings Group (Bunnings), achieved important capital-management objectives for the issuer. But while the deal's arrangers point to strong domestic and offshore demand for the transaction, they acknowledge the issuer features that made it appeal to buyers are also likely to restrict the range of credits which might follow Wesfarmers' lead.

A new asset-backed securities (ABS) issue based on a pool of small balance consumer loan receivables originated by FlexiGroup subsidiary, Certegy Ezi-Pay, priced on August 30. The transaction, Flexi ABS Trust 2013-2, matched its indicative volume of A$270 million (US$242.1 million) across its seven tranches.

August volume from high-grade issuers in the Kangaroo market confounded expectations of a slowdown around European summer. Particularly notable is increased demand at the long end of the curve for triple-A rated assets. But while longer maturities currently offer investors the yield they are seeking, the sacrifice for some borrowers in terms of all-in cost remains too great.

Asset class diversity was the main theme of the week in Australia, with issuance coming in a multitude of formats including senior secured, senior unsecured and asset-backed. Issuer sectors represented included banks, non-bank financials, corporates and offshore supranational, sovereign and agency names.


On August 30, Northern Territory Treasury Corporation (NTTC)(Aa1) priced an increase to its September 2021 domestic issue. According to KangaNews data the tap will be the first public increase of the line which was introduced in June this year with a volume of A$525 million (US$469.6 million) and pricing of 107.5 basis points over May 2021 Australian government bond.

Wesfarmers launched and priced an issue of senior-secured bonds from a special-purpose vehicle (SPV) backed by lease payments made on 15 properties leased by Wesfarmers to its subsidiary, Bunnings Group (Bunnings), on August 29. The deal comes three days after Wesfarmers announced a series of meetings with Australian fixed income investors to discuss the novel transaction.