Middle East on the AUD investor radar as First Gulf Bank debuts
Australian intermediaries say the debut of First Gulf Bank could be another sign of a growing trend whereby Middle East-origin issuers seek to tap the Australian investor base. The bank became the third from the region – and the second this year – to tap the Kangaroo market when it priced its inaugural issue on March 25.
Demand for AOFM's latest syndication allows tight pricing and largest-ever volume
The Australian Office of Financial Management (AOFM) says healthy demand for its latest syndicated deal – predominantly from domestic accounts – drove record volume. The AOFM priced a new A$7 billion (US$6.3 billion) 12-year syndicated issue on March 12 in a transaction which surpassed the Australian market's record deal volume – a 20-year A$5.9 billion deal also placed by the AOFM, in November last year.
Demand for lower-rated notes continues to support RMBS deal flow
Healthy investor demand for securitisation issuance saw two new deals, from AMP Bank (AMP) and Heritage Bank, price in the first week of March. Borrowers and joint lead managers agree the pipeline for further issuance is strong, supported by ongoing demand for lower-rated notes and bank balance sheet participation.
RBNZ hikes as expected and economists see hawkish tone for 2014
The Reserve Bank of New Zealand (RBNZ) raised the official cash rate (OCR) by 25 basis points to 2.75 per cent on March 13, in line with analyst and market expectations. The bank is the first developed-world central bank to raise rates in this cycle. Strategists and economists interpret the firm language in the accompanying monetary policy statement (MPS) as demonstrative of a "need for follow-up OCR increases".
Institutional tier-two dialogue continues as Westpac prints A$1 billion
Westpac Banking Corporation (Westpac) says its first Basel III compliant tier-two transaction issued without retail documentation further developed the institutional participation seen in Australia's first wholesale of new-style tier-two bank debt earlier this year. But while institutional investors are broadly becoming more comfortable with new-style tier two – in particular how to value non-viability – some say they still find better value elsewhere.