insto - Australian financial markets

If there was any doubt that 2009 was the year that the domestic bond market had got its groove back, it was well and truly erased in the third quarter, reports Jonathan Shapiro.

Conditions continued to improve, increasing the confidence of both issuers and investors.

From July to September, over A$30 billion of non-government bonds were printed, making it the busiest period of the year, exceeding Q2 total issuance by A$10 million and more than double the amount issued in the third quarter of 2008.

Suncorp Metway, rated A/A1/A+, has successfully priced its first non-guaranteed trade since the scheme was introduced in late 2008. The £300m five year transaction priced at a margin of 190 basis points over swap and was lead managed by RBS and UBS.

Suncorp Metway raised more government guaranteed funds in offshore markets, issuing US$750m of floating rate notes in EMTN format at Libor+23. RBS and UBS lead managed the deal.

Suncorp Metway has priced a A$1 billion four year government guaranteed fixed and floating rate notes issue at a margin of 38 basis points over swap/BBSW.

The deal was split into a A$200 million fixed rate tranche and a A$800 million floating rate tranche.

The A$200 million fixed rate tranche paid a coupon of 5.75 per cent at a capital price of 99.175 to yield 5.985 per cent. This equates to 38 basis points over swap.
The A$800 million floating rate tranche priced at par and pays a coupon on 38 basis points over three month BBSW.

Class A1  - A$111m - 0.18avg life rated A1-1+/F1+ 60bps

Class A2 0A$370m 0.82avg life AAA/AAA  90bps

Class A3 A$849.2m 3.63 AAA/AAA 130bps

B A$147m 7.8avg life  AA-/AA undisc

The AOFM has announced its next round of RMBS mandates, following the completion of the two previously mandated RMBS issues from Wide Bay and ACCU.

On 24 June, Suncorp-Metway priced a Samurai bond issue, guaranteed by the Commonwealth of Australia.

Suncorp Metway has issued US$2.5 billion of 1.5 year Australian government guaranteed 144a format bonds overnight. The bonds priced at a margin 37.5bps over USD Libor.

Maturity date is 17 December 2010. The bonds settle on 17 June 2009.

Lead managers on the transaction were Citi and Nomura.
 

Stocks slid for the second consecutive day as Fed meeting minutes dulled the enthusiasm of the recent market recovery.

The S&P500 fell 0.5 per cent after a sell off in the final trading  hour .US financial stocks in the index fell 2 per cent while most sectors were positive.

Earlier the Fed said that it may need to purchase more Treasuries in order to reduce the downside risks to the economy. The ‘bond friendly’ report pushed US Treasury yields lower with 2yr yields down 5bps, and 10yr and 30yrs down 6bps.