Demand strong as sun sets on old-style LT2 market
What could be the last 'old-style' lower tier two (LT2) subordinated debt transactions in the Australian market both attracted strong demand, as issuers and investors hurried to participate in transactions before the dawn of a new regulatory regime at the start of 2013. Market sources admit new subordinated securities, featuring explicit loss-absorbency and more equity-like features, are likely to be a harder sell in the institutional market.
RBA decision produces no surprise, and little alarm
The decision by the Reserve Bank of Australia (RBA) to cut the cash rate by 25 basis points, to 3 per cent, has been greeted with little or no surprise by analysts. Most post-decision commentary homed in on the likelihood – or otherwise – of the latest cut stimulating Australia's non-resources economy, with many analysts saying there is little reason to think the loosening cycle is at or even near its end.
Leads confident MYOB deal will end retail year on positive note
Ahead of the December 3 bookbuild of MYOB's subordinated retail bond offer, arranger and lead manager sources say they are confident that the transaction will close a highly-active year in the retail market on a high note. The transaction is for an indicative A$125 million (US$130.3 million) of five-year tenor paper, and is expected to pay a margin of 670-690 basis points over three-month bank bills.
QTC closes syndicated 2017 issue with four-times oversubscription
The new 2017 maturity issue priced on November 30 by Queensland Treasury Corporation (QTC) (AA+/Aa1/AA) had final volume of A$1 billion (US$1.04 billion) but a book four times larger, the issuer tells KangaNews. QTC capped the size of the syndicated issue of the new benchmark line in accordance with its funding need for the first half of its 2012/13 budget year.
Low retail supply supports Kiwibank's new instrument success
Kiwibank's issue of the first tier two instrument in the New Zealand market to contain explicit loss-absorbency language achieved strong investor support despite the securities' sub-investment grade rating, the issuer and its arranger say. The deal's structure made for an overwhelmingly retail buyer base, but in a market which continues to feature limited retail supply Kiwibank believes further subordinated bank issuance could find a welcoming home.