New issuers and increased funding requirements from established names are testing capacity in the Australian dollar high-grade market. Speakers from across the sector at the KangaNews Debt Capital Market Summit say they are confident that no-one needs to be crowded out – though finding untapped demand will remain a focus point.

Two more bond deals added to a February wave of issuance from the semi-government sector, taking volume raised in the second month of the year to A$6 billion. Deal sources say transactions continue to signal deep demand for semi-government debt at the start of the year, noting that wider spreads are luring investors, including from offshore, into books.

The early weeks of 2025 suggested markets are picking up where they left off at the end of the previous year: ample liquidity and generally favourable issuance conditions for good-quality borrowers despite periodic volatility prompted by a febrile geopolitical environment. Australia’s high-grade issuers enter the year with plenty of funding to do and – in the case of semi-governments – heightened scrutiny on their debt burdens. KangaNews and National Australia Bank gathered a group of female leaders from the issuer and investor spaces to discuss the market outlook.

Two themes emerged strongly from conversations at the 2024 Commonwealth Bank of Australia Global Markets Conference, which took place in Sydney and Melbourne in October. One is the shifting tectonic plates of geopolitics and macroeconomic norms, which makes forecasting the outlook more challenging than ever. The other is the underlying growth and improved functionality of the Australian debt market, which is producing opportunities and attracting capital in the high-grade and credit sectors.