09 May – 13 May 2016

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For the last week or two domestic bond issuers had gone quiet but the flames were rekindled in this latest week and more than a few of the bonds issued had 2026 maturities.  All up we estimate local issuers or issuers into the domestic market sold upwards of $15 billion worth of bonds which is about four times the value of bonds sold in the previous week.

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All four of the major banks offered large lines and quite a large chunk of them were sold in US markets, with some euro issuance as well. The largest offering came from Westpac with a USD$4 billion (AUD$5.5 billion) 4 tranche issue. ANZ and Commonwealth both went for a simpler 1 tranche approach; they issued USD$1 billion and USD$1.5 billion worth of bond with 2026 maturities respectively. NAB went to the Eurozone instead and issued one tranche of 2026s worth €1billion (AUD$1.538 billion) and another 2021 FRN tranche worth €750 million (AUD$1.154 billion)

S.A Power Networks also decided the US market was the place to be and raised USD $420 million via three tranches; USD$100 million ($135 million) of August 2026s, USD$210 million ($284 million) of August 2028s and USD$210 million ($284 million) of August 2031s.

The rest of the issues were in the local currency. Bank of Queensland issued $600 million 2021 FRNs at 3m BBSW + 148bps but was said to have pulled the fixed component which it usually issues when it raises funds in the bond market.  Airservices issued $200 million May 2023s and $200 million of May 2026s. Mercedes-Benz Australia issued $100 million May 2019s, Rabobank (Australia) sold $200 million August 2021s, Citigroup (Sydney) issued $150 million June 2021s

There must have been some desire on the part of buyers for an August/September 2026 maturity because the first four bond sales in the Kangaroo market each had this maturity date; European investment Bank issued $100 million August 2026s at Swap + 52bps, Swedish Export Credit Corporation issued $30 million September 2026s at ACGB + 62.75bps, Nederlandse Waterschapsbank issued $300 million September 2026s at ACGB + 76.5bps and KfW Bankengruppe issued $150 million September at ACGB + 56bps. The week then finished with Inter-American Development Bank selling $50 million February 2021 bonds and KfW Bankengruppe selling $300 million February 2021 bonds.

Credit default swap prices for Australian corporates generally stabilised over the week. The iTraxx Series 25 index rose to 134.9 down a touch from the previous week’s close of 135.70.

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AUS CORPORATE BONDS

ISSUERMATURITYCOUPON (%)RATINGWEEK
HIGH
WEEK
LOW
CLOSING
YIELD
Δ WEEKΔ MONTH
Stockland1-Jul-167.50A-2.692.662.66-0.01-0.39
Fonterra11-Jul-166.25A+2.602.552.55-0.05-0.33
Telstra2-Aug-167.00A2.422.382.38-0.03-0.27
Melb Airport25-Aug-167.00A-2.782.762.76-0.01-0.27
Mirvac Finance16-Sep-168.00BBB+3.002.942.94-0.04-0.32
Wesfarmers4-Nov-166.00A-2.652.622.650.02-0.24
Westpac18-Nov-167.25AA-2.252.232.23-0.03-0.29
Suncorp (CB)6-Dec-164.75n/a2.442.412.41-0.03-0.30
CBA (CB)25-Jan-175.75n/a2.282.242.24-0.03-0.29
Aust Post6-Feb-175.50AA2.562.542.55-0.01-0.26
Westpac (CB)6-Feb-175.75n/a2.282.242.24-0.03-0.29
NAB15-Feb-176.00AA-2.272.252.25-0.02-0.27
Westpac20-Feb-176.00AA-2.282.242.24-0.03-0.29
Crown18-Jul-175.75BBB3.303.113.290.15-0.52
BP Cap5-Sep-174.50A2.862.832.83-0.02-0.37
BHP18-Oct-173.75A+2.982.942.94-0.03-0.36
Telstra15-Nov-174.00A2.602.572.590.00-0.31
HSBC16-Nov-174.25AA-2.592.562.58-0.03-0.30
Westpac24-Jan-184.25AA-2.422.372.37-0.04-0.31
CBA25-Jan-184.25AA-2.402.362.36-0.03-0.30
NAB7-Mar-187.25AA-2.422.392.39-0.02-0.30
ANZ17-Apr-184.25AA-2.442.412.430.00-0.26
NAB23-May-184.00AA-2.452.422.440.01-0.26
Syd Airport6-Jul-187.75BBB3.012.992.99-0.01-0.27
ANZ6-Nov-184.50AA-2.562.532.54-0.02-0.29
Lendlease13-Nov-185.50BBB-3.723.693.710.01-0.64
Telstra13-Nov-184.50A2.722.692.710.01-0.29
Westpac25-Feb-194.50AA-2.642.602.60-0.04-0.29
Woolworths21-Mar-196.00A-3.443.273.440.15-0.25
Wesfarmers28-Mar-196.25A-3.012.973.000.02-0.28
CBA24-Apr-194.25AA-2.662.632.63-0.03-0.29
Bris Airport9-Jul-198.00BBB3.253.183.240.05-0.19
Apple Inc28-Aug-192.85AA+2.512.482.49-0.02-0.34
Stockland6-Sep-195.50A-3.273.233.260.01-0.30
DBNGP11-Oct-196.00BBB-3.823.793.79-0.02-0.25
Westfield Retail23-Oct-195.00A3.052.992.99-0.04-0.43
CBA5-Feb-207.25AA-2.792.752.75-0.03-0.28
Westpac11-Feb-207.25AA-2.802.762.76-0.03-0.28
Wesfarmers12-Mar-204.75A-3.223.213.210.00-0.29
Qantas27-Apr-206.50BB+4.204.184.18-0.01-0.28
Lendlease13-May-206.00BBB-4.384.364.37-0.02-0.28
Melb Airport4-Jun-205.00A-3.123.093.09-0.02-0.25
Telstra15-Jul-207.75A2.922.902.910.00-0.28
Perth Airport23-Jul-206.00BBB3.653.623.62-0.03-0.26
Mirvac Fin18-Sep-205.75BBB+3.713.673.690.02-0.25
Bris Airport21-Oct-206.00BBB3.573.503.560.05-0.18
Aust Post13-Nov-205.00AA2.832.792.79-0.02-0.25
Stockland25-Nov-208.25A-3.433.383.38-0.03-0.29
Uni Sydney16-Apr-214.75Aa12.722.682.68-0.03-0.25
Apple Inc28-Aug-223.70AA+2.962.932.940.01-0.27
Melb Airport15-Sep-224.00A-3.583.513.560.05-0.15
Telstra16-Sep-224.00A3.233.203.20-0.01-0.24
CBA (AU)27-May-244.75AA-2.952.912.91-0.02-0.20
NAB25-Jun-245.00AA-3.353.343.340.01-0.16
Wells Fargo & Co.27-Aug-244.75A+3.703.653.670.03-0.20
Uni Sydney28-Aug-253.75Aa13.323.273.27-0.02-0.19
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