Australia's first RMBS of 2014 hints at integration with coming regulatory reform
The successful inclusion of structural nuances in Australia's first residential mortgage-backed securities (RMBS) transaction of 2014 suggests that long-awaited regulatory changes in the Australian securitisation market are starting to filter down to deal level. The transaction garnered 50 per cent offshore interest, leading to intermediary confidence about the extent to which new technologies and structures could help to grow Australia's securitisation universe.
Euro spread action could slow AUD corporate pace in early 2014
Momentum in Australia's domestic corporate bond market could be stalled in early 2014 by highly appealing conditions internationally. Intermediaries say improving basis-swap dynamics, spread compression and the ongoing desire on the part of global investors to seek yield could draw more corporate borrowers towards, in particular, European issuance in 2014.
Offshore conditions slow domestic flow as Rabobank Australia reopens AUD market
Attractive pricing in offshore markets has seen the usual early-year providers of domestic AUD issuance opt to take funding outside the domestic market. While domestic AUD issuance volumes have lagged behind historical norms so far for the year, market participants tell KangaNews there is no shortage of demand and volumes are anticipated to pick up following Chinese new year.
APRA releases more detail on LCR holdings expected of Australian banks
The Australian Prudential Regulation Authority (APRA) has provided local banks with more detail around how the Australian liquidity coverage ratio (LCR) regime will work from implementation at the start of 2015. Significantly, in a January 30 letter to banks APRA reveals that the Reserve Bank of Australia (RBA) has determined that local banks can reasonably be expected to hold, in aggregate, 30 per cent of the total supply of Commonwealth and semi-government securities.
Domestic fund manager sentiment warms to tier-two issuance
In the wake of Australia's first wholesale-only issue of tier-two bank debt under Basel III rules, the transaction's issuer and lead managers say increased investor comfort around the new-style securities supported a significant oversubscription and price tightening. Bendigo and Adelaide Bank (BEN) sold A$300 million (US$265.6 million) of tier-two notes with, according to the issuer, a 2.5 times oversubscription.