Oceania

Australia and New Zealand Bank mandated joint leads for its second euro covered bond of the year and the fifth Australian benchmark in euros this year. The deal is expected to be launched on Wednesday, and should offer a premium relative to its own curve and a much larger premium to deals from eurozone borrowers.

Macquarie Leasing has maintained its price guidance on the single tranche of notes it has offered investors in its latest SMART auto and equipment ABS, with the Class As more than twice covered by indications of interest.

Bluestone Group has securitized a second diverse pool of pre-crisis Australian mortgage loans, offering investors eight tranches of bonds rated as low as single-B, while Queensland-based building society Wide Bay Australia is yet to price its prime RMBS in a busy week for the Australian dollar market.

Suncorp-Metway has priced its first covered bond deal since November 2012. The two tranche fixed and floating rate Australian dollar transaction offered an attractive 12bp spread pick up to where the previous covered bond issued by Royal Bank of Canada had been trading.

Commonwealth Bank of Australia (CBA) was set to price Australia’s first euro benchmark covered bond in single digit territory over mid-swaps on Tuesday. The deal, which was announced at short notice and which was slow to build early traction, nevertheless managed to attract new investors, though at 14%, bank demand was disappointing given the bonds are now eligible for their liquidity buffers.

Suncorp-Metway has mandated leads for a five year Australian dollar covered bond, the third in the currency this year and the issuer’s first since November 2012. The deal is expected to be launched this week.

National Australia Bank attracted a high level of European demand for a dollar denominated deal on Tuesday. The unusually broad distribution pays testimony not only to the novel syndication approach, but also the tempting outright yield relative to what would have been seen in euros.

National Australian Bank has returned to the covered bond market for its second deal in less than a week, opening books for the third dollar benchmark of 2014 on Tuesday. In contrast to the previous two dollar benchmarks issued this year, NAB took a global approach to syndication, encouraging interest from Asian, European as well as US investors.

National Australia Bank (NAB) looked set to tap a deal by double the minimum it had expected at less than half the spread the deal was originally offered at only three months ago. The increase comes after draft rules suggested covered bonds issued by banks outside the European Economic Area (EEA) will be eligible for inclusion in the liquidity coverage ratio, boding well for more supply from issuers outside Europe.

Fisher & Paykel Finance has priced NZ$283.25m of credit card ABS, the first time credit card receivables have been used as collateral for a transaction in Australia or New Zealand for a number of years.

Westpac New Zealand tapped the covered bond market for the first time since 2011 on Tuesday. The €750m five year was the most oversubscribed antipodean deal of 2014 and the most granular from the region. Around half the investors were new to the name.

The improving quality of the mortgages which back Australian covered bonds means they require less collateral than in the past to sustain a top rating, said Moody’s in a report on Wednesday. The assessment comes a few days after Fitch’s quarterly overview, which showed a sustained increase in investment mortgage lending. — But this higher risk lending is correlated to Australian house price growth which, since the year 2000, has exceeded both Spanish and Irish house price growth, according to data from The Economist.