insto - Australian financial markets

Redbank Project’s debt rating was lowered to CCC- from CCC+ by Standard & Poor's on Thursday. The power plant has encountered operating difficulties since October 2009, and it is uncertain whether planned capital works are adequate enough to stabilise operations.

The CCC- rating also applies to the A$170 million senior secured bonds issued by RB Pass Through, a securitisation vehicle for part of Redbank’s project debt.

2009. Three consecutive rate rises, record deal volumes, diverse issuers, and significant credit spreads. We saw the debut of government guaranteed issuance and semi-government syndicated transactions. We saw true corporate bonds and the rediscovery of retail funding channel. Australia proved that it can have a ferocious and healthy bond market, Sonia Han reports.

Crises create challenges, but also opportunities, and Insto’s 2009 Banker of the Year Mike Smith has made the most of finding opportunities in turbulent times and positioning his institution for exciting growth.

Financial Services Minister Chris Bowen, perhaps frustrated at ASIC’s lack of success in the court room over 2009, is proposing wideranging powers and beefed up penalties to stamp out insider trading and other market misconduct.

New Australian Bankers’ Association head Steven Munchenberg has been very restrained in his comments since his appointment was announced, but that may be because he is still under contract to his outgoing employer, the NAB.

Brookfield Multiplex has not ruled out speculation that it plans to list A$4 billion worth of office property on the ASX in 2010.
The Financial Review reported that the Canadian-owned property group was looking at a REIT structure for its Australian assets, with a listing date in the second half of 2010.

Private equity house Pacific Equity Partners has reportedly appointed UBS, Goldman Sachs JBWere and the Commonwealth Bank as lead managers to advise on the possible A$1 billion float of the Hoyts cinema chain. Hoyts manages 450 screens in 49 complexes in Australia and NZ, and is the largest independent distributor in Australasia. “In the private equity business it’s something you’re always considering. It’s budget setting time, so we’re setting out planning for the year,” said Hoyts executive chairman David Kirk. “The options are a trade sale or IPO.

Macquarie headaches

Macquarie Group has problems in the property sector after the refusal of banks to roll over nearly US$100 million of debt held by the listed Macquarie DDR Trust, the owner of mid-sized shopping centres across the US.
DDR has a combined US$413 million worth of debt due to expire by the middle of next month.
Six banks behind the Head Trust facility have advised DDR they are not prepared to extend loans “on current tersm.”
Talks are continuing.

ANZ gets Indian licence

HSBC Oz profit

HSBC’s Australian subsidiary has increased its year on year profit by 25 percent to A$251 million for 2009, against an A$201 million result for 2008.
Commenting on the result, HSBC Bank Australia chief executive Paulo Maia said: “These strong results can be attributed to three key elements, HSBC’s strategic focus on international connectivity, our relationship banking business model and importantly, our financial strength.

ANZ has reached an out of court settlement with former institutional banking chief Steve Targett, who sued the bank for A$57 million after being passed over as chief executive.

The case was due to be heard in the Federal Court next week, but the two parties reached agreement to end a two and a half year legal dispute in a move which takes a potential A$57 million liability off the ANZ balance sheet.

Targett left London in 2004 from Lloyds TSB to join ANZ, reporting to former chief John McFarlane.