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Positive sentiment in global markets enabled an early-year flurry of Kangaroo issuance, which saw A$2.225 billion (US$2.35 billion) price in six deals in the first full week of the year. Diverse demand pools are likely to facilitate issuance of both mid- and long-tenor deals, from a greater range of issuers. However, with rare exceptions Australian investors continue to play no more than a complementary role in supranational, sovereign and agency (SSA) Kangaroos.
Following a week in which A$2.225 billion (US$2.34 billion) of Kangaroo paper came to market in six transactions, World Bank (AAA/Aaa) mandated its own return to Australian dollar issuance on January 14. The supranational plans to place a new five-year Kangaroo in what will be its first Australian transaction since March 2012.
Australia's first domestic bond transaction of 2013 was mandated on January 14 as Commonwealth Bank of Australia (CommBank) (AA-/Aa2/AA-) announced plans to price a new five-year, senior unsecured deal. The self-led transaction will be CommBank's first domestic benchmark issue since June last year and the first from a big four Australian bank since December.
Kangaroo deal flow dominated the Australian market in the first active week of 2013 as six deals launched and priced for combined volume of A$2.225 billion (US$2.35 billion) by the close on January 11. Domestic markets in Australia and New Zealand remained quiet with no transactions from local borrowers officially launched by the end of the week.
Kommunalbanken Norway (KBN) (AAA/Aaa) priced its first Kangaroo deal of the year on January 11, with the agency adding A$150 million (US$158.7 million) to the A$300 million previously on issue in its July 2022 bond. KBN was the sixth borrower to price a Kangaroo deal in the new year and the fourth to offer 2022 bonds in its return to the Australian dollar market.
European Investment Bank (EIB) (AAA/Aaa/AAA) increased its August 2022 bond by A$400 million (US$423.4 million) on January 11. In the past EIB has often been an early mover in the Kangaroo market, but in 2012 it did not price a Kangaroo deal until February before issuing just A$1.5 billion in three trades for the whole year.
A mini Kangaroo boom at the start of 2013 continued on January 11 as Rentenbank (AAA/Aaa/AAA) launched and priced an increase to its March 2020 bond. The tap had indicative volume of A$400 million (US$423.4 million), taking the outstanding size of the line to A$1.05 billion.
The Australian Commonwealth government released an exposure draft of amendments to the Corporations Act on January 11, designed to streamline the offering process for "simple" corporate bonds. As expected the draft proposes a two-part prospectus regime and changes to personal liability rules for company directors, while leaving much of the detail of the prospectus setup to regulators.
Nordic Investment Bank (NIB) (AAA/Aaa/AAA) increased its April 2022 Kangaroo bond by A$100 million (US$105.8 million) on January 11. The tapped line was inaugurated in April last year and has been increased prior to the new deal pricing; it now totals A$775 million.
The first new Kangaroo bond of 2013 priced on January 10, as KfW Bankengruppe (KfW) (AAA/Aaa/AAA) added a new five-year point to its Australian dollar curve in a A$1 billion (US$1.05 billion) transaction. According to KangaNews data, the deal is the largest single-tranche issue in the Kangaroo market since Juky 2011.
The first Kangaroo deal of 2013 priced on January 9 as Inter-American Development Bank (IADB) (AAA/Aaa/AAA) issued an increase to its July 2022 bond. The supranational added A$175 million (US$183.3 million) to its longest-dated Kangaroo, taking the line's outstanding volume to A$850 million according to KangaNews data.
Early responses from Australian analysts offer little expectation that the Australian Prudential Regulation Authority (APRA) will follow the decision of the Basel Committee on Banking Supervision (BCBS) to ease liquidity coverage ratio (LCR) requirements for banks. On January 6 the BCBS increased the range of assets qualifying as level two liquids and extended the timetable for full LCR implementation, by four years, to 2019.