Post-CommBank covered bond commentary focuses on pricing and distribution
The issuer and lead managers of the first domestic covered bond from an Australian bank say the deal's pricing was appropriate to both a new asset class transaction and offshore comparables. The issue margin was notably wider than secondary spreads on Australian major bank senior unsecured paper, but deal participants point to the huge volume of the covered bond transaction and its wide investor base as proof of its successful execution.
More SSA borrowers lose AAA status and repo eligibility but EIB holds on
The most recent round of downgrades to European sovereigns by Standard & Poor's (S&P) – most significantly affecting the ratings of Austria and France – has caused A$2.45 billion (US$2.54 billion) of supranational, sovereign and agency (SSA) Kangaroo paper to lose its AAA status. The second largest Kangaroo borrower, European Investment Bank (EIB), has maintained its top S&P rating albeit with negative outlook.CommBank AUD covered bond debut breaks volume record [UPDATED]
Commonwealth Bank of Australia (CommBank) has become the first Australian bank to issue a home-currency covered bond, having completed a A$3.5 billion (US$3.6 billion) transaction in the week beginning January 16. CommBank recently made its covered bond debut in the euro market, pricing a €1.5 billion (US$1.9 billion) five-year deal on January 4.
Asian FI Kangaroo chances improve following IBK upsize, leads say [UPDATED]
Lead managers on the A$350 million (US$363.9 million) new four-year Kangaroo priced on January 17 by Industrial Bank of Korea (IBK) (A/A1) believe banks from Asia – especially Korean names – will seek to emulate the success of the upsized transaction. Although a clutch of Asian financial institutions priced domestic deals via their Australian branches in 2011, IBK's issue is the first true Kangaroo from an Asian credit since May 2007.