BNP Paribas tests the waters for Australian dollar tier-three
Leads on the first-ever total loss-absorbing capacity (TLAC)-compliant transaction denominated in Australian dollars say domestic interest in the deal was high despite complexities around pricing and other headwinds. Most importantly, they say there was apparent willingness to engage on the so-called “tier-three” asset class and little objection to the use of EMTN format.
Domestic demand key as AOFM ramps issuance up to record level
Surging domestic demand enabled the Australian Office of Financial Management (AOFM) to ride out apparent reduced nonresident holdings of Australian Commonwealth government bonds (ACGBs) in its return to syndicated issuance. The debt-management agency printed A$11 billion (US$8.4 billion) in a new November 2028 nominal bond on 22 February, having printed A$9.3 billion of new 2021s barely a month earlier.
Home is where the heart is
Global events of 2016 have, among many other consequences, served to make Australia’s political environment look relatively stable by comparison. Australia may have developed a habit of changing prime ministers on a more regular basis than is strictly desirable – five times in less than a decade, only twice as the result of elections – but political risk has never been high on investors’ checklists when it comes to Australia.
Subordinated demand and cost-competitiveness highlight Suncorp’s RMBS return
The Australian securitisation market received another boost on 24 February as Suncorp returned to residential mortgage-backed securities (RMBS) issuance with an upsized, oversubscribed deal. Apollo Series 2017-1 Trust (Apollo 2017-1) was a highly cost-competitive funding option, the issuer says, thanks in part to the capital relief generated by support from investors right down the deal structure.
Desire for diverse product drives Westpac’s record-breaking ABS outcome
Westpac Banking Corporation (Westpac) says investor appetite for diverse product supported robust print volume in its first asset-backed securities (ABS) deal of the year. The transaction achieved record volume, assisted by the inclusion of a jumbo privately placed A2 tranche in an unusual approach that Westpac says is efficient for issuer and investors.