Australian dollar

Kangaroo investors filled their pouches to the brim with a bumper World Bank tap on Wednesday. The supranational reopened its February 2024 Kangaroo to print the largest Aussie dollar tap in the SSA market since 2016.

It was a g’day for Citibank on Friday, as the issuer returned to the Australian dollar market to print its largest ever Kangaroo, according to Dealogic. In recent weeks, the Aussie market has presented a good alternative for FIG issuers looking to sell senior unsecured debt.

The Reserve Bank of New Zealand cut rates for the first time since 2016 to a record low of 1.5% on Wednesday. The RBNZ Monetary Policy Committee decision was the first under its new set-up, which included three external members on the committee.

Canadian Imperial Bank of Commerce issued its second Australian dollar deal of the year on Thursday. The senior unsecured short-term debt is not subject to Canadian bail-in regulation.

Syndicate bankers are expecting Kangaroo issuance to wane as the Japanese market shuts down this weekend for an extended holiday and Australia’s inflation outlook worsens.

The Inter-American Development Bank (IADB) priced its inaugural Kangaroo EYE bond this week. This issue was the product of more than four years of promoting the bond programme to domestic Australian investors, said Laura Fan, principal funding officer at the IADB.

A series of modest taps at the long end of the Australian dollar curve at the end of last week suggests that what has been a quiet market for Kangaroo bonds could soon spark into life, according to SSA funding officials.

Regular Kangaroo issuer Daimler came to the market on Thursday with its first Australian dollar issuance of 2019. Through its Australian entity, Mercedes-Benz Australia/Pacific, Daimler sold an A$150m ($106.2m) 2.5% March 2022 unsubordinated bond.

Both Kommunalbanken (KBN) and the International Finance Corporation (IFC) came to the Kangaroo market this week. A need for long dated Australian dollar paper from Japanese investors drove the deals.

Taps in Oceanic currencies flowed freely this week as two supranationals raised funds in the Kangaroo and Kauri markets.

The Kangaroo bond market’s recent bounce kept pace this week as Asian Development Bank on Tuesday raised an additional A$100m ($71.6m) with a tap of an existing A$250m issue. Bankers are confident that more supply could follow.

Investors were keeping cash from the private debt markets this week, though borrowers that have a definite issuance plan have been able to continue with their strategies.