On 16 July, the Australian Office of Financial Management (AOFM) (AAA/Aaa/AAA) launched its new May 2041 Treasury bond benchmark syndicated transaction. The forthcoming deal is being marketed at 39.5-44.5 basis points over the implied bid yield for the primary ten-year Treasury Bond futures contract. Pricing is expected on the day after launch.

On 11 July, Columbus Capital launched its residential mortgage-backed securities transaction, Triton 2018-1. The deal has an indicative total volume of A$500 million (US$371.1 million) equivalent, including the US dollar denominated Class A1-US notes. 

On 9 July, Queensland Treasury Corporation (QTC) (AA+/Aa1) launched a minimum A$500 million (US$371.7 million) syndicated tap of its August 2030 benchmark bond. Indicative price guidance for the forthcoming transaction is 65-67 basis points area over the 10-year futures contract and 59.75-61.75 basis points area over Australian Commonwealth government bond.

The big story in the Australian dollar high-grade market in 2018 has been 10-year US Treasuries (USTs) consistently yielding more than the equivalent Australian Commonwealth government bonds (ACGBs) – with little prospect of a reversion. KangaNews spoke to a range of dealers in June to get their read.

On 6 July, Australian Office of Financial Management (AOFM) (AAA/Aaa/AAA) revealed plans to issue a new May 2041 Treasury Bond via syndication. Commonwealth Bank of Australia, TD Securities, UBS and Westpac Institutional Bank are joint lead managers for the deal, which is expected to launch in the week beginning 16 July.

Pricing became challenging for Australian issuers in the Asian-targeted US dollar Reg S market later in the first half of 2018, after a flurry of corporate transactions over the preceding 12 months. But market participants in Asia insist the regional liquidity pool will increasingly challenge old favourites like US private placements (USPPs) and domestic issuance for Australian-origin flow.

The US private placement (USPP) market provided insulation from global volatility as well as the mix of tenors and volume Port of Melbourne desired for its capital markets debut, according to the issuer and its agents. With a large portion of its acquisition finance now termed out, the issuer says it has scope to consider public markets for future transactions.

On 29 June, Pepper Group (Pepper) revealed plans to meet US investors in the week commencing 9 July and Australian investors in the week commencing 16 July, regarding a possible nonconforming residential mortgage-backed securities (RMBS) transaction. The potential deal will include Australian dollar and US dollar tranches across 144A and Reg S formats.