New Zealand

Australia, New Zealand and Singapore to look at covered bonds to finance life after central bank funding

ANZ New Zealand is preparing to issue a tier two bond, marking its first foray into the format.

Covered bonds issued this week by SCBC and Bank of New Zealand were thinly oversubscribed and illustrated that investors are still sensitive to price, albeit that demand was good for a small green debut from Eika Boligkreditt and a tap from Oma Savings Bank.

Bank of New Zealand (BNZ) priced an €850m seven year covered bond on Tuesday in line with the bid side of Westpac New Zealand’s deal in the same size and tenor issued last week. Although the order book was thinly subscribed, lead managers deemed the quality of orders high.

Eika Boligkreditt has mandated joint leads for a 10 year and its first green covered bond under its newly established green framework. At the same time, Bank of New Zealand plans a seven year benchmark and Finland's Oma Savings Bank intends to tap its outstanding six year deal.

Westpac New Zealand attracted a high quality order book for a covered bond issue on Wednesday but it was slow to build and thinly subscribed, leading some to conclude that the market lacked confidence.

New Zealand has announced its new government bond programme will feature a 30 year syndication, extending its curve from 2041 to 2051.

Tuesday's €750m 10 year covered bond from ASB Finance demonstrated commitment to the market according to the bank's Treasurer, Chandu Bhindi, who spoke to GlobalCapital about the deal on Thursday.

Commonwealth Bank of Australia's New Zealand subsidiary ASB Finance issued its largest covered bond on Tuesday, the first 10 year from New Zealand and the first covered bond from the country since January 2019. The focus for this week’s transaction was all about re-engaging with investors, said ASB Bank treasurer, Chandu Bhindi.

Commonwealth Bank of Australia's New Zealand subsidiary ASB Finance issued its largest covered bond on Tuesday, the first 10 year from New Zealand and the first covered bond from the country since January 2019.

Commonwealth Bank of Australia’s New Zealand subsidiary, ASB Finance, has mandated leads for the first Kiwi covered bond since January 2019. At the same time, Berlin Hyp has appointed lead managers for a 12 year mortgage Pfandbrief.

New Zealand will be an important test case for mandatory reporting on climate risks. Financial firms everywhere would be wise to sit up and take notice.