insto - Australian financial markets

The week started from two significant euro bonds from Telstra and CBA, and ended with four new ABS transactions from Bankwest, BEN, Colonial, and Macquarie. NZ’s Southland Building Society also added two new RMBS tranches.

Moody’s Investor Services issued three downgrades on Friday. The rating for United Energy Distribution (UED) was lowered to Baa2 from Baa1, and in a separate action, DBNGP Finance (DBNGP) and Energy Partnership were cut to Baa3 from Baa2. As a result, around A$2.8 billion in debt securities were affected.

The agency said it previously recognised the weak financial profiles of electricity distributor UED and gas distributor EPG, while the downgrade in Perth based DBNGP’s rating reflects the lack of cushion in its credit metrics.

2009 wasn’t a bumper year for the syndicated loan market, but then that could be said of many other product sectors of the market as well. According to Thomson Reuters, the Australian loan market post a loss of 41.7 per cent over 2009 to reach US$44.8 billion in proceeds.

As part of our 2009 review, Insto caught up with Tony Cripps, Head of Global Banking and Markets, HSBC Bank Australia.

How has investment banking in Australia changed during 2009

While the rest of the world saw a marked decrease in M&A activity over the course of 2009, the Asia- Pacific region held strong. With 2194 announced deals worth an aggregated US$412.4 billion in 2009, the region finished the year with a gain of 5 per cent in terms of total value and a small drop of 5 per cent in terms of volume compared to full year 2008 numbers.

As part of our 2009 review, Insto caught up with Craig Drummond, Chief executive, Australia, Bank of America-Merrill Lynch.

How has investment banking in Australia changed during 2009

Investors who jumped from skyscrapers in 1929 and those who sold out in panic after the 1987 crash should at least have provided historical lessons to those who watched in dismay as the Australian sharemarket plunged by more than 40 per cent in 2008.

It will never be known to what extent that historical experience was heeded, but it is a matter of record that the ASX All Ordinaries Index gained 33.4 per cent over 2009, after falling 43 per cent in 2008. The other main index, the S&P/ASX 200, put on 30.8 per cent after slumping 41.3 per cent the previous year.

As part of our 2009 review, Insto caught up with Rick Sawers, Group Executive, Wholesale banking, NAB.

How has investment banking in Australia changed during 2009

Listed Brisbane-based brokerage Wilton HTM has a new chief executive with the promotion of David Groth and a settlement with major shareholder Deutsche Bank. Wilson HTM has agreed to pay Deutsche, which holds a 19.9 percent stake in the company, $2.5 million a year as a percentage of its profit for the past four and a half years. The firm has lead managed, co lead managed and underwritten $3.4 billion in IPOs since 2005 as well as being involved in A$5.2 billion in M&A transactions. Two Deutsche Bank directors will stay on the Wilson HTM board.

Morgan Stanley has poached Mark Burmeister from UBS to head up its equity capital markets business. The move comes after UBS lost Guy Foster to Merrill Lynch. Morgan Stanley recently poached Matt Comyn from Commsec, and two former Merrill traders, Anthony Goonan and Richard Sweeting.