› ASB MATCHES HSBC MARGIN
Kiwi major ASB BANK (A1/AA–/AA–) raised
NZ$600m on August 13 from a five-year
MTN offering arranged by its Australian
parent company CBA.
The 1.83% August 19 2024s priced at par,
85bp wide of mid-swaps.
The margin matched the 85bp mid-swaps
spread paid by similarly rated HSBC New
Zealand (Aa3/AA–/AA–) for its NZ$100m
1.835% five-year MTN issued on August 9.
› BNZ CONFIRMS SPREAD TIGHTENINGBANK OF NEW ZEALAND (A1/AA–/AA–) raised
NZ$250m from last Friday’s self-led three-
year floating-rate note offer, priced at
three-month BKBM plus 65bp.
Pricing reflects the significant tightening
in credit spreads since February when
fellow Kiwi majors Westpac New Zealand
and ASB Bank issued NZ$400m and
NZ$500m three-year FRNs, both at 83bp
over three-month BKBM.› HOUSING NZ TO TAP IN SEPTEMBERHOUSING NEW ZEALAND, rated AA+ (S&P), intends
to tap its NZ$250m 3.36% June 12 2025 and/
or NZ$250m 3.42% October 18 2028 bonds
in September via joint lead managers ANZ
and Westpac.
The initial sale, planned for July, was
postponed following a cabinet reshuffle
that included changes in the housing
ministry. ANZ and Westpac are joint lead
managers.
HNZL is a crown agency that provides
housing services for New Zealanders in
need.PHILIPPINES
DEBT CAPITAL MARKETS
› SMC BOND ISSUE OPENS ON SEPT 23SAN MIGUEL CORP has announced the offer
period for Ps10bn (US$191m) five-year
fixed-rate retail bonds, according a release
on the Philippine Stock Exchange.
The issue opens to the public on
September 23 and closes on September 27.
The bonds will be listed on October 4.
The local conglomerate met qualified
institutional buyers for the planned retail
bond offering in Manila on August 22
and filed a prospectus with the market
regulator.
BDO Capital & Investment Corp, China Bank
Capital Corp, PNB Capital and Investment
Corp and RCBC Capital Corp are the lead
underwriters and bookrunners for the
issue.
The proceeds from the issue will be used
to redeem outstanding series 2B preferred
shares of the company in the event it
exercises the option or to refinance short-
term peso loans.
The notes will be issued off a Ps60bn
shelf registration programme filed with the
Securities and Exchange Commission.
The issuer last raised Ps30bn from
triple-tranche peso bonds in February 2018
and Ps15bn from triple-tranche bonds in
February 2017.EQUITY CAPITAL MARKETS
› SEC APPROVES ALLHOME, AXELUM IPOSThe Securities and Exchange Commission
has approved the IPOs of housing supplies
retailer ALLHOME and coconut product
manufacturer AXELUM RESOURCES that aim toSSA trio revive Kauri market
Bonds Favourable swap costs tempt overseas issuersForeign issuance has picked up in New
Zealand’s Kauri bond market, a development
partly attributable to moves in the cross-
currency basis swap and US swaps spreads
which have made the New Zealand dollar
market more attractive to overseas issuers.
Three Triple A rated supranationals tapped
existing lines for a combined NZ$875m
(US$560m) between August 16 and 20,
taking year-to-date Kauri supply up to
NZ$3.325bn from nine transactions. This
compares with annual issuance in 2018 of
NZ$6.15bn, just shy of the annual record of
NZ$6.3bn set in 2014 and repeated in 2015.
The upturn, after a slow first half, when just
NZ$1.85bn was printed, follows an increase in
the four-year New Zealand-dollar US dollar
cross-currency basis swap from a low of 22.75
on July 3 to 26.5, alongside the US swaps
spread’s decline into negative territory.
“The Kauri market has become a more
attractive alternative funding market in recent
weeks because of these shifts,” said a New
Zealand syndication manager.
In previous years offshore investors were
drawn to New Zealand’s absolute yield
advantage as the highest paying jurisdiction
in the developed world, until the deep and
liquid US market started offering better
returns as the US economy picked up speed
and others slowed.
Last Wednesday, five-year New Zealand
government bonds were yielding 0.82%,
well below the 1.43% five-year US Treasury
yield, but above 0.67% and 0.38% five-year
Australian and UK returns, let alone the
negative 0.94% and 0.33% yields paid by
Bunds and JGBs in that segment.
SSA Kauris also offer a little extra juice over
the sovereign curve compared to Australia
with INTER-AMERICAN DEVELOPMENT BANK paying
a 53.5bp NZGB spread for its NZ$175m July
2024 tap versus the 44bp ACGB marginfor Asian Development Bank’s A$350m
(US$238m) five-year Kangaroo on August 8.
Domestic demand is underpinned by bank
balance sheets and cash-rich investors who
have only a small amount of potential Triple
A and/or Double A rated assets available to
acquire, given the lack of local securitisations
and limited government supply.
Pent-up appetite for high-quality assets
enabled the NEW ZEALAND LOCAL GOVERNMENT
FUNDING AGENCY, rated AA+/AA+ (S&P/Fitch),
to raise a non-sovereign domestic record of
NZ$1bn for its inaugural syndicated five-year
sale in March.
LGFA followed up its debut deal with last
week’s NZ$500m short 10-year (April 20
2029) print.INTERNATIONAL RESCUE
ASIAN DEVELOPMENT BANK tapped its 3.0% January
17 2023 Kauri bond for NZ$425m on August 16
to take the issue size up to NZ$925m.
The reopening, via sole lead manager ANZ,
priced at 106.157763 for a yield of 1.142%,
27bp wide of mid-swaps and 42.45bp over
the April 2023 NZGB.
On August 20 INTERNATIONAL FINANCE
CORPORATION added NZ$300m to its 2.625%
September 7 2023 line, increasing the
outstanding amount to NZ$900m.
ANZ was also sole lead for this reopening,
which priced at 105.461685 to yield 1.229%, in
line with mid-swaps plus 30bp guidance and
46bp over the April 2023 NZGB.
On the same day Inter-American
Development Bank increased its 3.5% July 16
2024s by NZ$150m to raise the bond’s size to
NZ$325m.
Joint lead managers BNZ and CBA priced
the tap at 110.386628 for a yield of 1.30%,
34bp and 53.5bp wide of mid-swaps and the
April 2023 NZGB.
JOHN WEAVERS