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Emerging Markets

New Zealand treasury plans inflation bond for early 2011

Philip Combes, head of the country’s debt management office, says that the country looks most likely to launch a new inflation-linked bond by February next year. The agency had initially targeted this month but an uncertain inflation outlook led it to forestall its plans.

  • 17 Nov 2010
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The New Zealand Debt Management Office intends to issue an inflation-linked bond of between NZ$500 million-NZ$1 billion (US$ 386 million-US$772.2 million) by February 2011.

Speaking to asiamoney.com on the sides of the Euromoney China Global Debt Capital Markets Congress, Philip Combes, treasury of the government debt funding arm, said that he had initially planned to issue the deal this month. However an uncertain inflation outlook led him to delay the plans.

“We need inflation to be 2.5% for the deal to work but it’s been moving away which led us to delay the issue, but now it’s coming back,” he said.

Combes says that according to economic predictions inflation should reach the required level to launch a deal by February. The debt management office has a syndicate of banks on standby to launch the deal, and Combes said that it would take two weeks to price the inflation-linked bond once he gave the go-ahead.

The debt management office raised US$12 billion this year and is likely to require a similar amount in 2011 and 2012.

Earlier Combes had spoken in a session alongside Colin Kim, director of the Office of Debt Management for the US Department of the Treasury, and Robert Stheeman, chief executive of the UK Debt Management Office, about raising sovereign funds in a post-recessionary world, where quantitative easing holds sway.

Kim discussed how the US Treasury had managed to extend the average maturity of US Treasuries from 52.5 months in late 2009 to 58.5 months today, an extension of six months during a time when there are more Treasuries outstanding than ever before.

He also noted that the US had developed inflation-linked bonds in 1977, and for China to develop a similar type of instrument might well help the People’s Bank of China monitor the market’s view of inflation. “

Both Kim and Stheeman said it was unlikely their respective debt management offices would be tapping the renminbi market soon, while Combes said, “we’ll look to issue renminbi bonds as soon as they are cheaper to do than New Zealand dollar bonds”.

Combes also said that New Zealand was unlikely to conduct any benchmark Eurobond issues in the future, something that it as a nation has once trailblazed in during the 1970s.

“We don’t have much debt funding to do both [international currency and domestic currency funding], we’ve regretfully had to pick one of two options and decided to pick up our New Zealand dollar issuance,” he said. “However over two-thirds of our bonds are held offshore.”

  • 17 Nov 2010

Bookrunners of International Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
1 HSBC 66,677.92 399 10.15%
2 Citi 65,903.33 324 10.03%
3 Deutsche Bank 62,123.51 299 9.45%
4 JPMorgan 57,926.10 280 8.81%
5 Bank of America Merrill Lynch 37,734.03 215 5.74%

Bookrunners of LatAm Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
1 HSBC 6,221.38 14 11.59%
2 JPMorgan 5,140.67 18 9.58%
3 Bank of America Merrill Lynch 4,497.27 18 8.38%
4 Deutsche Bank 4,264.56 14 7.95%
5 Credit Suisse 4,132.73 8 7.70%

Bookrunners of CEEMEA International Bonds

Rank Lead Manager Amount $m No of issues Share %
1 Citi 7,103.94 21 0.00%
2 JPMorgan 6,391.69 17 0.00%
3 Barclays 5,235.31 11 0.00%
4 Deutsche Bank 4,325.08 11 0.00%
5 HSBC 3,388.08 11 0.00%

EMEA M&A Revenue

Rank Lead Manager Amount $m No of issues Share %
1 Goldman Sachs 184.87 44 12.87%
2 Bank of America Merrill Lynch 96.40 30 6.71%
3 JPMorgan 94.14 45 6.55%
4 Deutsche Bank 89.92 33 6.26%
5 Lazard 84.17 46 5.86%

Bookrunners of Central and Eastern Europe: Loans

Rank Lead Manager Amount $m No of issues Share %
1 ING 382.49 5 8.60%
2 Commerzbank Group 292.65 4 6.58%
3 UniCredit 275.33 3 6.19%
4 SG Corporate & Investment Banking 271.81 3 6.11%
5 Raiffeisen Bank International AG 207.65 3 4.67%

Bookrunners of India DCM

Rank Lead Manager Amount $m No of issues Share %
1 Standard Chartered Bank 1,142.00 13 0.00%
2 AXIS Bank 1,096.97 30 0.00%
3 Deutsche Bank 1,016.41 16 0.00%
4 Barclays 699.87 9 0.00%
5 Trust Investment Advisors 698.72 32 0.00%