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Canadian Imperial Bank of Commerce (CIBC) says its new Kangaroo covered bond, which priced on October 17, was prompted by improved appetite for AUD covered bonds and globally competitive pricing. The issuer says it is very happy with the result, but it had hoped for more development of the covered bond asset class in the Kangaroo market – especially in terms of the real-money investor base.
On October 23, commercial print company PMP (NR) closed its four-year unsecured bond with oversubscribed volume of A$50 million (US$48.5 million), from A$40 million minimum size. Bonds were priced in line with the indicative coupon, at 8.75 per cent.
Western Australian Treasury Corporation (WATC) (AA+/Aaa) priced a new July 2025 maturity domestic line on October 22. According to KangaNews data, WATC priced its previous syndicated domestic deal on October 17, a three-year issue with a volume of A$750 million (US$724.4 million) and pricing of 9 basis points over three-month bank bill swap rate.
On October 21, Treasury Corporation of Victoria (TCV) (AAA/Aaa) priced a new fixed rate November 2017 maturity domestic line. According to KangaNews data, TCV priced its previous syndicated domestic deal on September 6, a 17-year issue with a volume of A$30 million (US$29 million) and pricing of 67.25 basis points over Australian government bonds.
Aurizon Network (BBB+/Baa1) says it selected the local market for its record-breaking capital markets debut because it was competitive with offshore alternatives. Meanwhile, Australia's domestic investors attribute the solid demand with which the deal was met to the relative scarcity of non-financial Australian dollar issuance.
Contact Energy (Contact) has elected to redeem the entire outstanding volume of its domestic hybrid issue, in response to the reduction in equity credit afforded to the instrument by Standard & Poor's Ratings Services (S&P) in April. The Contact hybrid was issued in a NZ$200 million (US$169.9 million) transaction in 2011 and will now be redeemed on its next interest payment date, November 15.
Pepper Australia (Pepper) priced its second nonconforming residential mortgage-backed securities (RMBS) issue of 2013 on October 16. Pepper Residential Securities Trust No. 11 has an eight-tranche structure with an indicative aggregate volume of A$300 million (US$286 million).
A slow week for Australian bond issuance ended with a flourish. Canadian Imperial Bank of Commerce returned to the market with a new five-year FRN deal, the issuer's first Australian market transaction since July 2011, and Aurizon Network issued the market's largest-ever single-tranche triple-B corporate deal.
On October 18, Aurizon Network (Aurizon) (BBB+/Baa1) – the rail freight group formerly known as QR National – priced its debut transaction in the domestic market. According to KangaNews data this is the largest-ever AUD deal for a triple-B rated corporate borrower in a single tranche. In September 2010, DBNGP Finance raised A$550 million (US$528.7 million) in one visit but this was divided between five-year fixed- and floating-rate pieces.
Canadian Imperial Bank of Commerce (CIBC) (A+/Aa3/AA-, with an issue rating of NR/Aaa/AAA) priced a new covered bond issue on October 17 in the issuer's first Australian market transaction since July 2011 and just the second Kangaroo covered bond deal this year.