Australian dollar

Central banks across the world seem to be heading towards rate cuts, accelerated by the need to mitigate the economic effects of the Covid-19 outbreak. An unintended consequence of this is an increasing scarcity of attractive arbitrage funding opportunities for borrowers. This sort of funding, typically a perk of the best rated borrowers, will concentrate funding risk for them instead — ironically at a time when they should benefit from their safe haven status.

The Australian Prudential Regulation Authority (APRA) outlined plans to develop and impose "vulnerability assessments", or stress tests, to evaluate the resilience of Australian banks to the effects of climate change.

Industrial and Commercial Bank of China turned to the Australian debt market on Monday to raise A$500m ($336m) through its Sydney branch.

First Abu Dhabi Bank (FAB) issued its first post-merger Kangaroo bond on Tuesday, raising A$350m ($234.9m) — becoming the first Middle Eastern bank to tap the market in two years.

First Abu Dhabi Bank (FAB) is ready to hop into the Kangaroo market this week, having mandated a pair of banks to lead a potential five year Aussie dollar deal, offering an attractive spread.

Two supranationals hopped into the Kangaroo market with environmental, social governance (ESG) bond taps this week, in a move that is becoming increasingly popular. With a local holiday this weekend marking the end of antipodean summer, bankers expect Australian dollar issuance to restart in the next few weeks.

The first Kangaroo deals of 2020 from SSAs started trickling through this week, after ANZ blew the doors off the Australian dollar market with a A$3.5bn ($2.4bn) self-led domestic deal on Tuesday.

For public sector issuers, niche currency deals have offered attractive opportunities for arbitrage funding, with spreads into euros and dollars spurring on demand this year. Meanwhile, strong investor appetite for green paper has seen niche shoots blossom throughout 2019. Frank Jackman reports

In its first visit to the capital markets, VisionFund International, a subsidiary of World Vision, the Christian mission focussed children’s charity and non-profit organisation, accessed a competitive method of funding that will help it “to penetrate deeper into rural areas” and benefit those in greatest need.

Ford Motor Credit Company mandated banks on Tuesday to lead a new Australian dollar deal, its first since 2016.

Verizon Communications, the US telecoms group, returned for the second time to the Kangaroo market on Wednesday to extend its curve out to 20 years in what one lead manager described as a first for the market.

Verizon Communications, the US telecoms group, is preparing to return to the Kangaroo bond market with a multi-tranche deal, offering maturities up to 20 years — far longer than its longest outstanding 10 year tranche.