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A smaller than expected Australian federal budget deficit outcome for the last completed financial year has led the Australian Office of Financial Management (AOFM) marginally to reduce its projected funding need for the 2011 financial year. The debt management agency now expects to borrow A$53-58.5 billion (US$53.2-58.7 billion) in FY11, down from a forecast A$60 billion following the federal budget in May.
Volkswagen Financial Services Australia (VW Australia) (A/A3) issued a A$100 million (US$100.3 million) increase to its August 2013 bond in what will be the issuer's fourth transaction in the Australian market this year. The tap - which was upsized from a A$50 million launch volume - brings the outstanding volume of the issuer's 2013, which was introduced in August and increased once in September, to A$250 million.
On November 10, Telstra Corporation (Telstra) (A/A2) increased its June 2020 domestic line by A$200 million (US$200.5 million), upsized from a launch volume of A$100 million. The line was inaugurated in June this year, and was Telstra's first domestic transaction in almost four years. The deal priced in line with the expected margin of 175 basis points over semi-quarterly swap – a margin 25 basis points tighter than the original trade.

Commonwealth Bank of Australia (CommBank) (AA/Aa1/AA) completed the bookbuild of its five-year retail-format senior bond offer on November 26. CommBank has confirmed a minimum A$500 million (US$481.75 million) of retail bonds will be sold to eligible brokers, with the capacity to increase the final deal volume to A$1 billion before the offer closes on December 17. The margin has been set at 105 basis points over bank bill swap rate (BBSW).

APN Media (NR) launched what many market participants expect will be the final New Zealand retail corporate transaction of 2010 on November 8, announcing the forthcoming sale of a minimum of NZ$150 million (US$118.2 million) of March 2016 bonds. The deal, which has room for an upsize of up to NZ$50 million, will have its margin set on November 12 and will be issued on December 15.
The divestment of a significant portion of Australasian assets into a new property trust will not reduce the prospects of future Westfield Group bond issuance in Australia, the firm insists. Meanwhile the new entity, Westfield Retail Trust (WRT), will seek credit ratings and is expected to look to the domestic market as its most natural source of debt funding once the rating process is complete.
After a subdued start to the week for fixed income issuance a number of sectors have started firing in Australia, with the announcement of two new asset-backed securities (ABS) deals, two Kangaroo taps, one agency issue, and three domestic bank deals all having come to the market in the past seven days.
Citigroup (A/A3/A+) re-bought a total of A$1.2 billion (US$1.2 billion) of its Australian government-guaranteed June 2012 bond line at an equivalent margin of 5 basis points over swap on November 5. The buyback – of A$412.7 million of fixed rate paper and A$786.5 million of floating rate notes – accounts for the majority of the line, which was issued in a A$1.3 billion transaction in June 2009 and was not subsequently tapped.
The Australasian securitisation market burst into life at the start of the month with three forthcoming transactions having preliminary ratings confirmed on the same day, November 4. Australian Central Credit Union (ACCU) is planning a residential mortgage-backed securities (RMBS) deal, while Macquarie Leasing and Motor Trade Finances are closing in asset-backed securities (ABS) transactions in Australia and New Zealand respectively.
The first Kangaroo deals of the month came from Council of Europe Development Bank (CEB) (AAA/Aaa) and Rentenbank (AAA/Aaa/AAA), who both increased long-dated lines on November 5. CEB increased its October 2020 Kangaroo by A$200 million (US$202.9 million), taking the total volume outstanding to A$500 million, while Rentenbank added A$250 million to its April 2017 bond.