Oz duo sink, market environment blamed

The much vaunted Australian covered bond deals priced by Westpac and ANZ this week have not performed well. Bankers away from the deals say the process has been a sham and the deals’ poor performance bodes poorly for follow-on transactions. But those who worked on the trades say the wider market backdrop turned significantly negative in the last 48 hours, with bids becoming excessively defensive across the entire financial institutions sector, and the fact that both deals were oversubscribed and well placed is a positive development.