Australia

The return of two Australian major banks to securitization this week helped put more than A$4bn equivalent of new RMBS and auto ABS bonds on the market.

Commonwealth Bank of Australia (CBA) became the fourth non-Chinese bank to issue a Basel III tier two bond in the offshore renminbi (CNH) market. Although it wasn't able to tighten guidance, the Australian bank took advantage of favourable renminbi-dollar swap rates and managed to save cost.

Australian financial institutions are facing a much brighter future in China, after a free trade agreement opened up the possibility of easier access to the country's banking system. But for now the main opportunities are still going to lie offshore — and, in particular, with the mouth-watering possibilities of the offshore renminbi market. Matthew Thomas reports.

Fitch expects Australian borrowers to reduce their issuance of covered bonds by A$1.5bn to about A$16.5bn (€11.7bn) this year compared to last. Assuming just over half of this is conducted in euros, as was the case in 2014, the agency’s forecast is broadly in line with the average estimated by five covered bond analysts in December.

National Australia Bank issued its first euro benchmark covered bond of the year, and by choosing a maturity that would offer investors a relatively attractive yield, the issuer ensured a strong reception.

NAB has mandated joint leads for the second euro denominated Australian covered bond of the year. A long dated transaction is envisaged and books are expected to open on Thursday.

Bank of China Sydney (BoC Sydney) inaugurated RMB clearing services on February 9 after being appointed to the role in November 2014 by the People’s Bank of China (PBoC).

Macquarie Securitization Limited celebrated Australia Day on Monday by launching a roadshow for what may be the first Australian RMBS to be priced in 2015, well over a month since the last supply from the country.

Macquarie Securitisation Limited celebrated Australia Day by launching a roadshow for what may be the first Australian RMBS to price in 2015, well over a month since the last supply from the country.

Covered bond issuers from outside the Eurozone launched deals this week denominated in sterling and Australian dollars. But a bigger proportion were from the Eurozone where borrowers launched deals in the single currency in maturities that ranged from four to 20 years. The transaction were priced generously and enjoyed a solid reception, with central banks taking a back seat.

Bank of Nova Scotia has returned to the covered bond market for a second time this week, mandating leads for the first Australian dollar covered bond deal of the year.

Westpac was set to price the first euro-denominated covered bond of the year on Thursday in a move that is likely breathe confidence into the market, following a disappointing end to 2014.