insto - Australian financial markets

What a quiet week due to holidays in China and the US. However, we saw the third government guaranteed issue since the announcement of the withdrawn of the wholesale bank funding guarantee, a highlight $2bn 5yr transaction from ING last Thursday.

ING A$2bn 5yr GG Bond

German Rentenbank (Aaa/AAA/AAA, outlook all stable) has said it will keep issuing notes in the AUD market next year, which volume will be in line with previous years.

The bank, with total assets of EUR 78.6 billion as of June 2009, said it will focus on the five to seven year curve, print new notes and increase its outstanding issuance.

The bank’s total outstanding A$ MTN issues are A$ 5.7 billion. Details are:

Notes totalling an additional A$120m were issued on 30 November by Perpetual Limited, the trustee of PUMA Sub-Fund B-1.This transaction is not being distributed, but is a repo-eligible deal, held on balance sheet. These notes are in addition to the existing A$1.0bn already on issue – that is, the total balance of the transaction is now $1,120m. The top tranche is rated as follows by Fitch:

Kiwibank, the retail banking subsidiary of New Zealand Post (rated AA-), is roadshowing ahead of an AUD bond deal. The issuer is said to be planning a A$400m maximum issue with a maturity of three years, five years or both; following the roadshow. The deal will be explicitly guaranteed by the NZ government and rated AA+/Aaa/AAA. The securities are also understood to be 100 per cent repo-eligible with the RBA.

US stocks bounced back on Wednesday as bargain hunters picked up financials after the previous session’s sell-off. The Fed’s seemingly upbeat assessment also boosted equities.

The S&P500 index advanced 1.2 per cent to close back above the 1,000 mark.

As expected the Fed did not move interest rates. Their statement said that economic activity is ‘leveling out’ confusing the market, which sold off slightly before recovering.

Less ambiguous was the Fed’s plans to end its Treasury buyback program which will run until October.

Global response, local reaction

In early July, Insto magazine and Mallesons hosted a roundtable on future financial markets regulation, with participation from a wide-cross section of the industry.

Barclays Bank plc Australia Branch, rated AA-/Aa3 has formally launched a senior domestic three year trade.

The deal is benchmark volume with price talk in the swap plus 170 basis points area and will price in the near future subject to market conditions.

The bonds are expected to be repo-eligible with the RBA.

Lead managers are ANZ, Barclays Capital, CBA, NAB and Westpac.
 

Celebrating the new financial year, ABN AMRO’s Australian Branch (now part of RBS) priced a three-tranche Commonwealth Government guaranteed AUD transaction. The deal was launched a day earlier (on 30 June) under the bank’s A$5bn debt issuance program.

See below for key pricing parameters for the fixed and floating rate notes.

As outlined in its half year report to 31 December 2008, the ASX group intends to assess the attractiveness of borrowing terms and conditions available through the US private placement market. The ASX is considering going to this market for a minimum of A$145 million (or the equivalent amount in USD) of long-term debt capital to improve its funding flexibility.

• The Wall Street Journal reported that the Fed is considering whether to increase the maturity of the loans offered under the Term-Asset-backed Securities Loan Facility (TALF) from three to five years.