insto - Australian financial markets

Gone are the days of the talent shortage. Now there is a surplus of good candidates in the market, changing the balance of power – but the Government's boost to the bonds market means the search for good bankers has already re-started, reports Alexandra Cain.

The latest industry statistics show the size of assets under custody and administration in Australia expanded this year.

Insto editor Bernard Kellerman spoke to Paulo Maia, HSBC Australia's new CEO about his bank’s performance and, as an ex-debt capital markets expert, his views on where the domestic deals are heading.

Insto: Who do you see as your main competitors?

In what was the most widely anticipated and predicted rate rise in many months, at its meeting today the Reserve Bank Board decided to raise the cash rate by 25 basis points, to 3.5 per cent. The rise is effective from tomorrow, 4 November.

The US debt capital markets are flooded by big name investment grade bonds, priced to move. Australian issuers face a tough task, reports our US correspondent, Caren Chesler.

Well, it’s not quite the booming IPO market of the late 1990s, where deals were oversubscribed hundreds of times over and stock prices skyrocketed 300 per cent in the aftermarket. That said, the US corporate bond market in the second quarter saw many deals in which there were more investors lined up than bonds to buy.

“It was similar to the IPO market of the late 90s in that every deal was oversubscribed,” said Kenneth Naehu, managing director, fixed income, at Bel Air Investment Advisors in Los Angeles.

In May, Australian shopping centre specialist Westfield Group made a successful return to the Yankee market with a US$700 million 5-year offering. Bernard Kellerman reports.

Westfield’s opportunistic US$700 million 144a senior notes issue caught everyone by surprise, and the list almost included the group’s very seasoned deputy CFO, Domenic Pannacio. He was on a half yearly roadshow, and stopped by to keep some of his existing bondholders up to date.

The co-ordinated response to the banking crisis appears to have benefitted the owners of the world’s largest banks in no uncertain terms. The results from the US banks in the last few days have emphatically confirmed that, with first Goldman Sachs and then JP Morgan delivering their best results ever, backed by a better than expected efforts from Bank of America (with Merrill Lynch yet to be fully digested) and Citigroup.

On 26 June, Rabobank Nederland Australia Branch (rated AAA (stable) /Aaa (stable) by S&P and Moody’s, respectively), priced a new A$650 million deal.

Queensland Treasury Corporation (AA+/Aa1) has today (18 June) priced a new A$3.25bn benchmark 14 June 2019 senior unsecured transaction.

The notes are issued off QTC's domestic AUD bond programme and carry a semi-annual coupon of 6.25 per cent accruing RBA bond basis. The notes are priced to yield 6.43 per cent semi-annually, at a spread of ACGB 5.25 per cent Mar 2019 + 84 bps.

Capital price: 98.687, priced with 9 days of accrued interest, with a full first coupon on 14 December 2009.

Settlement date is 23 June 2009.

In keeping with the emerging trend for foreign banks with substantial operations in Australia to issue in AUD, on 17 June ING Bank (Australia) Limited priced two tranches of 5-year government guaranteed notes: