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Asian Development Bank (AAA/Aaa/AAA) (ADB) surprised the market on May 6 with a A$375 million (US$282.6 million) new five-year Kangaroo bond. The deal was the first new Kangaroo line priced since the same issuer brought its last five-year transaction in March last year and the first deal of that tenor since International Finance Corporation (AAA/Aaa) tapped its 2013 in June 2008.

On May 7 Airservices Australia (AAA) (AsA) priced its five-year domestic bond offer, achieving its guidance pricing level and with it a margin significantly tighter than the most recent transaction from a top-rated Australian corporate – Australia Post’s March 25 five-year – at 100 basis points over swap compared to 130 over.

ANZ Banking Group (AA/Aa1) (ANZ) became the third of the big four Australian banks to price a billion dollar unguaranteed deal in 2009 on May 5 as it sold exactly A$1 billion (US$740.2 million) of three-year paper at 128 basis points over swap in a self-led transaction.

Speculation is growing that the forthcoming Australian federal budget will include a commitment to reigniting the market for inflation-linked commonwealth government securities (CGS), which was suspended in the 2003 budget when Australia concentrated its then-limited federal debt issuance in shorter-dated treasury bonds.

Tabcorp (BBB+) closed its five-year bond offer on April 30 having added A$84 million (US$60.86 million) to the initial A$200 million allocation to the institutional and brokerage sector. With around 90 per cent of the total paper being placed with retail investors, lead managers believe the transaction will spark further corporate issuance in the Australian retail market

On April 29 Rabobank Nederland (AAA/Aaa) (Rabobank) set the margin on its New Zealand market PIE (portfolio investment entity) Capital Securities transaction at 375 basis points over swap and announced it has upsized the transaction, to NZ$330 million (US$186.85 million) from the indicative level of NZ$200 million at launch.

The latest residential mortgage-backed security (RMBS) to be launched with backing from the Australian Office of Financial Management (AOFM) follows the pattern of recent asset-backed deals in Australia, splitting its senior tranches between a fast pay piece and a much larger one with a longer weighted average life (WAL).

National Australia Bank (AA/Aa1/AA) (NAB) entered the market for bonds not covered by the Australian government guarantee for the first time on April 29 with the largest such transaction yet seen – a total of A$1.5 billion (US$1.07 billion) of fixed and floating rate three year bonds.

The Kangaroo market, which had stood dormant for eight months until being reopened by KfW Bankengruppe (AAA/Aaa/AAA) (KfW) on April 27, saw its second transaction in two days when European Investment Bank (AAA/Aaa/AAA) (EIB) priced a A$500 million (US$349.65 million) increase to its August 2013 line.

On April 23 KfW Bankengruppe (KfW) (AAA/Aaa/AAA) broke the eight-month drought in the Kangaroo bond market with a A$150 million (US$108 million) increase to its January 2012 bonds, bringing the size of this line to A$1.4 billion. The tap, led by TD Securities (TD), priced at 75 basis points over mid swap. 

In its annual corporate default and ratings transitions study for the Australian and New Zealand market in 2008, Standard & Poor’s (S&P) says the downgrade to upgrade ratio increased significantly from the levels of recent years but had yet to reach its peak from the last Australian economic slowdown.

Having completed its most recent round of residential mortgage-backed security (RMBS) investments, on April 17 the Australian Office of Financial Management (AOFM) announced the next three originators to which it will allocate funds as part of its A$8 billion (US$5.75 billion) injection into the Australian mortgage sector.