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Australian government guaranteed issuance spiked up again last week led by Westpac Banking Corporation (AA/Aa1) (Westpac)'s massive yen transaction – the largest ever by an Australian issuer at ¥245.3 billion (A$3.97 billion). Total Australian guaranteed issuance reached the equivalent of US$4.01 billion in the week – almost double the previous two weeks combined.
A day after its A$600 million fixed and floating rate bond issue Rabobank Nederland (AAA/Aaa) (Rabobank) increased both the fixed and floating rate note (FRN) tranches by A$100 million each, to bring the total size of the fixed tranche to A$300 million and the FRNs to A$500 million. The increases priced at the same level as the inaugural bonds - 130 basis points over swap (fixed) and the bank bill swap rate (FRNs).
On February 2 Westpac Banking Corporation (Westpac) (AA/Aa1) stunned the market with the biggest-ever Samurai bond issued by an Australian bank. The Australian major issued a total of ¥245.3 billion (US$2.7 billion) in Samurai and euro-yen format. The Samurai bond is the first to be issued in 2009 and is also the first ever sovereign-guaranteed Samurai bond.
TD Securities (TD) will no longer have an origination, sales or trading facility in Sydney as the bank has revealed all these functions will be moved to Singapore "in the coming weeks". The firm has yet to confirm details of staffing changes or how the new setup will be structured, but market sources have cast doubt in its ability to maintain its origination performance in Australia with no local facility.
Demand for Australian government guaranteed bonds continued on January 20 as Bank of Queensland (BBB+/A2/BBB) (BOQ) became the first triple-B rated issuer to price a deal under the sovereign scheme, bringing A$500 million (US$331.15 million) of 2011 paper to its home market.
Australian banks had by January 14 conducted the equivalent of over US$30 billion in term borrowing under the conditions of their government's guarantee scheme since the first such deals were brought to market in early December 2008.