Australia/New Zealand bond house

IFR Asia Awards 2014
3 min read
Asia
John Weavers

The Australian and New Zealand bond markets took on new global significance in 2014, as a growing number of international issuers turned to an expanding local investor base in search of alternative sources of funding.

Australia and New Zealand Banking Group was at the forefront of this trend, leading Australian dollar issuance and doing more than any other arranger to connect international issuers with Australasian investors.

Benefiting from its offices in Dubai and Abu Dhabi, it was a joint bookrunner on all four of 2014’s Kangaroo issues from the Middle East as National Bank of Abu Dhabi, First Gulf and Emirates NBD and Abu Dhabi Commercial raised a combined A$1.3bn – the latter three all being debut issuers.

Paul White, ANZ’s global head of debt syndicate, said such deals offered diversification, as well as volume, for overseas issuers, with levels at the five-year maturity similar to or inside other major markets. Investors, meanwhile, got an attractive yield relative to similarly rated local financials.

Other standout debutants in the Kangaroo market in 2014 include ABN Amro’s January 28 A$500m debut, also the first deal of the year outside the sovereign and agency sector. ANZ was the only domestic bank on the dual-tranche five-year bond from the Dutch commercial bank.

ANZ also helped arrange Korea National Oil Corp’s A$350m Kangaroo debut in September, and was the only local lead manager to work on all three Kangaroo bonds from South Korean banks.

Arguably even more significant was September’s ground-breaking debut from Anglo-Swiss mining giant Glencore, with a A$500m five-year bond that gave Australia’s underdeveloped corporate bond market a welcome shot in the arm.

Crucially, Glencore passed the local participation test as Australian investors took 67% of the offering, underlining the country’s growing appeal as a key funding alternative for global companies.

ANZ was a joint lead on the deal, which became the second biggest of the 39 corporate bonds printed in Australia during the awards period, and was rewarded with a role on Total’s debut Kangaroo offering in November.

The bank ranks No 1 on the league table for all Australian dollar issues in the review period with an even 100 trades, totalling almost A$20bn (US$17.4bn), and remains a big player in the local securitisation market, taking part in 13 asset-backed transactions during this time.

It was similar story across the Tasman Sea, where overseas issuers raised a record NZ$6bn (US$4.65bn). ANZ was lead manager on 15 of the 25 Kauri tickets – the most of any bank – and led 18 of the 28 domestic New Zealand dollar bonds during the year.

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