Long one of the most significant issuers from the supranational, sovereign and agency sector in the Kangaroo and Kauri markets, European Investment Bank picked its moments to print a substantial volume of Australian dollars once again in 2023. Key funding executives from the supranational share their end-of-year views with KangaNews on a range of issues – including seeking tenor in a challenging market, New Zealand dollar prospects and having a major role in financing the EU’s energy transition.

Changing market conditions caused the supranational, sovereign and agency sector to supply more volume to the Australian dollar market in 2023 than it ever has before. Despite typical seasonal issuance patterns, demand remained robust throughout the year – including for newer names – and raised expectations for the sector’s development in 2024.

In October 2023, KangaNews and UBS hosted female leaders from the supranational, sovereign and agency sector – live in Sydney and via VC globally – at a roundtable to discuss the state of capital markets and the role of these institutions in promoting sustainability and diversity, equity and inclusion.

Supranational, sovereign and agency issuance in Australian dollars has had a knock-out year, with new supply surpassing an annual record that had stood for nearly a decade and a half. Supply has resumed after a particularly acute mid-year lull, but intermediaries’ attention is now turning to next year as the new-issuance ground looks less fertile in the near term.

Finding a way to reliably and meaningfully support environmental transition is perhaps the greatest contribution sustainable finance could make to achieving climate goals – and sustainability-linked bonds have been presented as critical tool for doing so. But flatlining issuance highlights what is perhaps the sector’s greatest challenge to date: how to agree, measure and monitor genuine transition ambition.

Some of the world’s leading issuers from the supranational, sovereign and agency sector took part in a virtual discussion about funding conditions and issuance approaches in mid-2023. The borrowers tell KangaNews the Kangaroo market has an increasingly structural role in their funding plans despite ever-changing demand dynamics. The New Zealand market, meanwhile, is facing up to a major regulatory risk event.