COUNTRY REPORT
Australia 21 China 24 Hong Kong 30 India 33 Indonesia 35 Japan 36 New Zealand 38
Philippines 38 Singapore 39 South Korea 41 Taiwan 41 Thailand 42 Vietnam 43AUSTRALIA
DEBT CAPITAL MARKETS
› TD OPENS TLAC KANGAROO MARKET
TORONTO-DOMINION BANK, rated Aa1/AA–
(Moody’s/S&P), raised A$1.25bn (US$875m)
from the first TLAC Kangaroo bond offering
by a Canadian bank.
Last Wednesday’s transaction could
trigger copycat trades from other Canadian
majors as long as comparative pricing stacks
up, according to a banker on the deal.
A A$700m five-year floating-rate note
priced inside 105bp area guidance at three-
month BBSW plus 100bp.
A A$550m 2.05% fixed-rate five-year note
priced at 99.776 for a yield of 2.0975%,
100bp wide of asset swaps.
The banker said this represented a modest
single-digit new issue concession against
where a new benchmark Toronto-Dominion
US dollar five-year note would price.
Pricing was competitive despite an
approximate 10bp decline in the Australian
dollar/US dollar five-year cross-currency
basis swap from March and April levels, to
around 23bp last week.
ANZ, CBA, DBS, NAB, Standard Chartered
Bank and Westpac were joint lead managers
for the notes, which have expected ratings
of Aa3/A (Moody’s/S&P).› RABOBANK TAPS FOR A$150MRABOBANK AUSTRALIA BRANCH (Aa2/A+/AA–)
tapped its March 3 2022 FRN for A$150m
last Tuesday, increasing the outstandingsize to A$650m.
ANZ was sole lead manager for the
reopening, which priced at 101.22,
equivalent to 62bp over three-month BBSW.› ME BANK PRINTS INSIDE GUIDANCEMEMBERS EQUITY BANK, rated Baa1/BBB
(Moody’s/S&P), raised A$400m last Thursday
from a three-year floating-rate note offering
that priced inside 105bp area guidance at
three-month BBSW plus 98bp.
ANZ and NAB were joint lead managers.
Members Equity previously sold a
A$250m three-year FRN in April 2018
and subsequently issued two RMBS
and a A$100m perpetual non-call five
subordinated AT1 note.
Unlisted ME Bank is a private entity
under the control of 30 Australian industry
superannuation funds.Westpac jumps up Down Under
Bonds Australian major surges up the local league tableWestpac jumped seven places to head the
Australian dollar bond league table for the
first six months of 2019, according to Refinitiv
data, having secured a 13.8% share of the
market.
Overall Australian dollar bond issuance
fell 19% in the first six months of 2019 to
A$42.4bn (US$29.4bn) from 156 trades,
excluding self-led deals and securitisations,
as the government dialled back syndicated
issuance.
The A$9.7bn contraction from the
A$52.1bn raised through 170 transactions in
the same period last year is almost entirely
explained by the absence of syndicated
Commonwealth government issuance,
following the record-busting A$9.6bn
November 2029 Treasury bond sale in
January 2018.
Westpac has been a lead manager on 31
deals, the same number as Australia and
New Zealand Banking Group, which lies
second with an 11.8% market share.
Westpac has made quite an advance from
H1 2018 when it occupied a lowly 8th place
with a 6.2% market share. ANZ led last
year’s January 1 to June 30 standings with
an 11% share from 38 trades, followed by
CBA and UBS.
Domestic financial (including self-led deals), SSA Kangaroos and local
corporate bonds are little changed from
year-ago levels at A$30bn, A$12.0bn
and A$3.5bn, while Commonwealth and
state government supply declined from
A$19.8bn to A$11.1bn.
The other notable change was in the non-
bank Kangaroo sector, where issuance has
slowed to A$4.6bn from over A$7bn a year
earlier.ASSET-BACKED GROWTH
Westpac also tops the Australian
securitisation league table thanks to its
self-led A$3bn WST 2019-1 Trust RMBS in
February.
Similarly, ANZ’s self-led A$1.5bn
Kingfisher RMBS elevates it to third spot
in the securitisation market, just behind
traditional market leader NAB, which has
been on 15 of this year’s 20 ABS/RMBS
tickets, none of which were self-led.
CBA and Macquarie complete an all-
Australian top five.
In contrast to the bond market downturn,
Australian dollar securitisations have raised
around 13% more than H1 2018’s total of
A$14.5bn, thanks to an upturn in non-bank
and major bank RMBS supply.
Only one major bank sale was executedin the first half of 2018, the NAB-originated
A$2bn National Trust 2018-1.LOWER OFFSHORE VOLUME
HSBC topped the offshore league table
having been on 20 of 53 foreign currency
tickets for an 11.5% share of this year’s
US$25.2bn market.
Supply is down nearly 29% from the
US$35.2bn, 68-deal market in the same
period of 2018 as Australian financials and
corporates scaled back their overseas funding
efforts.
This contraction is mainly due to Australian
banks’ reduced borrowing requirements,
which allows them to meet most of their
needs in the cheaper local markets.
In addition, Australian corporates did a lot
of pre-funding last year to take advantage of
the low yield environment, according to DCM
desks.
Citigroup has helped 14 Australian issuers
to public overseas markets for a 10.7%
share of the H1 2019 table and second place
behind HSBC. Next come JP Morgan, Bank of
America Merrill Lynch and BNP Paribas.
Citigroup held the lead this time last year
with a 9.5% share, closely followed by HSBC
and JP Morgan.
JOHN WEAVERS