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On February 20 ANZ National Bank (ANZ National) (AA-/Aa3) confirmed it is calling for indications of interest in a new seven-year senior deal in the domestic market. The bank had already announced its plans for early redemption of NZ$250 million (US$210.2 million) of subordinated bonds that were issued in February 2007, on their March 2 call date.

The Australian Office of Financial Management (AOFM) completed the bookbuild of a new inflation-linked bond line on February 21 having added A$150 million (US$160.7 million) to the deal's launch volume of A$750 million. The transaction is the AOFM's second syndicated inflation-linked issue since it returned to the market in September 2009; it launched its 2030 linker a year later.

Deal flow in Australia focused on the retail market in the week ending February 17, and although four subordinated or hybrid transactions launched the long gestation period of these issues means completed primary market activity was limited to a single Kangaroo. Meanwhile, New Zealand saw its first public domestic issue of 2012.

Westpac Banking Corporation (Westpac) (AA-/Aa2/AA) set the margin on its retail-friendly hybrid transaction on February 23, with the 325 basis points over bank bill swap rate (BBSW) pricing level coming at the tighter end of the deal's indicative range. Westpac Convertible Preference Shares (Westpac CPS) launched on February 16 with a marketing range of 320-350 basis points over BBSW.

New Zealand's Local Government Funding Agency (LGFA) (AA+/AA+) completed its first-ever tender on February 15, placing a total of NZ$300 million (US$249.9 million) of three- and five-year notes with a cover ratio of over four times. The agency acknowledges it paid a slightly higher margin than it had hoped, but market sources tell KangaNews the debut should be considered a success and there are grounds to expect price tightening.

Rabobank Nederland New Zealand Branch (Rabobank New Zealand) (AA/Aaa) upsized its new three-year domestic transaction – the year's first new deal from a local issuer in New Zealand's public market – at pricing on February 17. The issue was doubled in size to close at NZ$300 million (US$251.3 million).

On February 24 Australia's recently-vibrant retail debt market saw a third deal price with an upsize, as Colonial Group (Colonial) (A+) doubled the volume of its subordinated note offer to A$1 billion (US$1.1 billion). The transaction set a margin of 325 basis points over bank bill swap rate, at the tight end of its indicative range.

ANZ Banking Group (ANZ) (AA-/Aa2/AA-) increased the size of its new subordinated transaction on February 20, allocating A$1.5 billion (US$1.6 billion) to the bookbuild or A$1 billion more than the initial minimum target volume. The issuer also set the transaction margin at 275 basis points over bank bill swap rate (BBSW), the tightest end of its 25 basis point indicative range.

Hong Kong Mortgage Corporation (HKMC) (AAA/Aa1) priced the third Asian issuer Kangaroo transaction of 2012 on February 14, issuing its debut in the Australian market in the form of a A$500 million (US$534.5 million) five year. The transaction follows a brace of Kangaroos from Korean banks, Industrial Bank of Korea (A/A1) and Korea Finance Corporation (KoFC) (A/A+), at the start of the year.

The issuer and lead arranger of Tabcorp Holdings (Tabcorp)'s (BBB) subordinated retail bond offering say the transaction demonstrates the buy- and sell-side appeal of a particular type of listed bond issuance. On February 15, Tabcorp set the margin on the minimum A$200 million (US$213.8 million) subordinated offer at 400 basis points over bank bill swap rate (BBSW).

A day ahead of the February 15 first tender of bonds from New Zealand's Local Government Funding Agency (LGFA) the new borrower has set out a bullish line on pricing. While conceding that it will have to pay a new issue premium, the LGFA believes there are strong fundamentals supporting initial pricing at least 40 basis points tighter than even the lowest margin individual local authority paper.