COUNTRY REPORT
Australia 19 China 21 Hong Kong 32 India 36 Indonesia 40 Japan 41 Macau 43 Malaysia 44
New Zealand 45 Philippines 46 Singapore 47 South Korea 49 Taiwan 49 Thailand 49AUSTRALIA
DEBT CAPITAL MARKETS
› ANZ SETS MAJOR BENCHMARKS
AUSTRALIA AND NEW ZEALAND BANKING GROUP (Aa3/
AA–/AA–) established new major bank
clearing rates with last Thursday’s self-led
A$3bn (US$2.05bn) multi-tranche senior
unsecured MTN sale.
A A$1.2bn three-year floating-rate note
priced inside 60bp area guidance at three-
month BBSW plus 58bp.
A A$1.35bn five-year floating-rate note
priced below 80bp area guidance at three-
month BBSW plus 77bp.
A A$450m 1.55% fixed-rate five-year MTN
priced at 99.964 to yield 1.5575%, 77bp
wide of asset swaps.
The last major bank to issue five-year
notes was National Australia Bank with
a A$2.5bn dual-tranche sale on June 12,
priced at 92bp over three-month BBSW and
asset swaps.
Westpac was the last of the big four
Aussie lenders to issue three-year notes
with a A$1.5bn three-year FRN on May 8
which came 62bp wide of three-month
BBSW.
› WESTPAC MAKES MORE TIER 2 INROADS
WESTPAC (Aa3/AA–/AA–) took another slice
out of its extra A$13bn Tier 2 capital
requirement with a self-led A$1bn 10-year
non-call five note issue.
The note, with expected ratings of Baa1/
BBB (Moody’s/S&P), priced inside 205bp area
guidance at three-month BBSW plus 198bp.
Last Wednesday’s sale followed the
bank’s US$2.25bn (A$3.3bn) dual-tranche
SEC-registered print on July 16, comprising
a US$1.25bn 4.11% 15-year non-call 10 note
and a US$1bn 4.421% 20-year bullet.
Westpac said it needed to raise a net
A$13bn to meet the Australian Prudential
Regulatory Authority requirement, released
on July 9. This called the country’s four
major banks to lift their capital to risk-
weighted assets ratios by three percentage
points to a minimum 17% by January 1
2024, primarily via Tier 2 instruments.
National Australia Bank, ANZ and
Commonwealth Bank of Australia
estimated their respective additional Tier 2
needs to be A$12.1bn, A$12bn and A$13bn.
NAB raised US$1.5bn from a 3.933% 15-
year non-call 10 144A/Reg S Tier 2 note
on July 30 and ANZ issued a local record-
breaking A$1.75bn 10-year non-call five on
July 19, priced at three-month BBSW plus
200bp.
This included A$750m to replace an ANZ
Tier 2 note that was called on June 25.
The last of Australia’s big four lenders,
CBA, is now in position to issue Tier 2
notes again having come out of a blackout
after publishing its full year earnings on
August 12.› ACT OPENS MAY 2025 LINEAUSTRALIAN CAPITAL TERRITORY, rated AAA (S&P),
raised a record A$1bn from a syndicated
sale of a new 1.25% May 22 2025 bond on
August 13 via joint lead managers ANZ, UBS
and Westpac.
The biggest ever issuance by the semi-
government borrower priced at 100.499
for a yield of 1.16%, within 49bp–52bp
guidance at 50bp over the three-year
futures contract and 42.4bp wide of the
April 2025 ACGB.
ACT previously sold a A$675m 2.25% 10-
year bond on May 15.› UBS CONFIRMS AUSSIE AT1 BENEFITSUBS GROUP became the second international
issuer of Additional Tier 1 capital notes
in Australian dollars last Tuesday with a
heavily oversubscribed perpetual non-call
five EMTN offering.
The A$700m 4.375% subordinated note,
with expected ratings of BB/BBB– (S&P/
Fitch), priced at the tight end of final
4.375%–4.500% guidance, well below both
5.125% initial price thoughts and 4.875%
area initial guidance.
Price traction from IPTs matches the
75bp progression for the higher rated
BNP Paribas A$300m 4.5% perpetual non-
call 5.5-year AT1 Reg S note (Ba1/BBB–/
BBB) issued on July 30 that began life with
5.25% area price thoughts. The BNPP yield
has subsequently declined to 4.14% in the
secondary market.
In addition to obvious diversification
benefits, the new UBS Group AT1 note
priced significantly inside secondary levels
for its US$2.5bn 7.0% perpetual non-call five
issued on January 28, which was yielding
5.36% last Tuesday.
The order book peaked at over A$3.78bn
with 113 investors participating in the
transaction.Asian accounts, including clients of
private banks looking to deploy Australian
dollar funds, bought 62% of the note with
Australia taking 33% and EMEA 5%.
Private banks were allotted 37%, asset
managers 33%, middle market 15%, hedge
funds 11% and others 4%.
UBS Australia branch was sole global
coordinator and joint lead manager with
ANZ, CBA, NAB and Westpac for the note.› WATC BREAKS FRN RECORDWESTERN AUSTRALIAN TREASURY CORP, rated
Aa1/AA+ (Moody’s/S&P), opened a new
benchmark bond line on August 14 with
a A$1.1bn syndicated sale of February 21
2024 floating-rate notes.
CBA and NAB were joint lead managers
for the largest floating-rate issuance by the
state funding arm which priced at the wide
end of three-month BBSW plus 21bp–24bp
guidance.
In conjunction with the transaction,
WATC repurchased A$447m of its
November 19 2019 FRN at 100.052 and
A$40m of its 7% October 15 2019s at
100.869 on a matched settled basis.
WATC previously issued a bond via
syndication on February 9 with a A$1.015bn
sale of 2.75% July 24 2029s.› TCORP TENDER NETS A$300MNEW SOUTH WALES TREASURY CORP, rated Aaa/AAA
(Moody’s/S&P), increased its 2.0% March 20
2031 bond by A$300m following an August
16 Yieldbroker tender which received
A$555m of bids at the final price.
The highest and lowest allocated spreads
over the September 10-year bond futures
contract were 63.25bp and 62bp, while
the weighted average accepted spread was
63.0417bp.
The initial syndicated sale of the bond on
July 25 raised A$1.25bn and priced 66.5bp
wide of 10-year futures and 60bp over the
June 2031 ACGB.› VW AUSTRALIA EXTENDS LOCAL CURVEVOLKSWAGEN FINANCIAL SERVICES AUSTRALIA,
rated A3/BBB+ (Moody’s/S&P), extended
its domestic curve by more than a year
last Wednesday with a A$350m five-year
MTN sale arranged by joint leads ANZ and
Citigroup.
The 2.4% August 28 2024s priced at
99.684 to yield 2.4675%, well inside both
initial 175bp-180bp and refined 175bp area