Demand for seven-year tenor attracts KOSEP's debut Kangaroo
Korea South-East Power (KOSEP) issued its first-ever Kangaroo deal on September 12 in what was the year's third transaction into the Australian market from a Korean borrower, and the second from a Korean corporate. Joint lead managers on the deal say strong demand for seven-year tenor brought the borrower to the market.
Higher rates forecasts lead World Bank to meet FRN and shorter-dated demand
Increased buy side demand for floating-rate product and shorter maturities convinced World Bank to simultaneously bring its debut benchmark floating-rate Kangaroo and tap its fixed-rate November 2016 notes. With interest in both formats driven by reverse enquiry, intermediaries say there may be similar issuance opportunities ahead.
Australian investors still happy holders of old-style tier two despite downgrade
Australian investors say the downgrade of old-style tier-two debt announced by Moody's Investors Service (Moody's) on September 5 does not reduce the value they see in the asset class. Fund managers continue to believe the pre-Basel III subordinated issuance of, in particular, domestic big four banks is a value hold. They do not anticipate any price action in the wake of the downgrade.
RMBS demand swings back in favour of bank books
Market recovery and strong investor demand for securitisation issuance saw two new deals, from AMP Bank and Macquarie Group, price in the first week of September. Joint lead managers agree the pipeline for further issuance is strong, but acknowledge a shift in residential mortgage-backed securities (RMBS) distribution weighting towards bank balance sheet participation.
Issuer specifics likely to make Wesfarmers' Bunnings deal an outlier
Wesfarmers says its recent domestic deal secured on properties leased by the firm to its subsidiary, Bunnings Group (Bunnings), achieved important capital-management objectives for the issuer. But while the deal's arrangers point to strong domestic and offshore demand for the transaction, they acknowledge the issuer features that made it appeal to buyers are also likely to restrict the range of credits which might follow Wesfarmers' lead.