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Kauri issuance from supranational, sovereign and agency (SSA) borrowers has lagged the long-run average so far in 2019 (see chart 6). Demand is evident but swap levels have not made issuance possible even for some of the market’s more consistent borrowers.
A decade or more of global QE programmes demonstrates that how central banks deploy stimulus is almost as important as the size of the package. The Reserve Bank of Australia (RBA) could provide funds at federal- or state-government level, or to various parts of the private sector.
The major banks have indicated that the increase in tier-two supply will, at the margin, be at the expense of issuance in other formats. This will change the composition of their overall funding and could also influence the traditional sources of that funding.
With global funding markets offering plentiful liquidity and attractive pricing, corporate borrowers may be tempted – at the margin – to front-load issuance requirements. Novel structures may be required to make this approach pay off, however.
As the environmental, social and governance (ESG) finance market grows, so does focus on robust and credible standards for securities. As a relatively bespoke product based on borrowers’ sustainability targets, the sustainability-linked loan (SLL) is no different.
Global efforts are underway to create a common language and standards for sustainable finance, with the EU taxonomy perhaps the biggest development in this space so far. Australian market participants recognise the value of harmonisation but also say it has finite boundaries.
With global funding markets offering plentiful liquidity and attractive pricing, corporate borrowers may be tempted – at the margin – to front-load issuance requirements. Novel structures may be required to make this approach pay off, however.
With global funding markets offering plentiful liquidity and attractive pricing, corporate borrowers may be tempted – at the margin – to front-load issuance requirements. Novel structures may be required to make this approach pay off, however.
The Australian Business Securitisation Fund (ABSF)’s final investment guidelines contain several key changes from the draft guidelines published in May. The changes are designed to give more clarity on the ABSF’s end goals, enhance transparency and compliance, and remove any disincentives to participation.
At the end of 2019, CAF – Development Bank of Latin America (CAF) will celebrate its 50th anniversary. In May, the development bank visited Australia to meet issuers and investors. As part of its global anniversary celebrations it also held a reception for its Australian dealers at Quay Restaurant in Sydney.
New Zealand’s corporate bond market enjoyed a record year in 2018 (see chart 2). Deal flow has not been quite as strong in 2019 so far, as falling yields have made the asset class less attractive for institutional and retail investors.
The issuance trajectory of Germany’s federal states is price-positive, and issuers say there is no prospect of their presence in global capital markets evaporating in the foreseeable future.