ASIC has updated its private markets review which looks set to increase transparency in private credit. It seems that one of its focal points will be retail offerings and we saw ASIC move to halt new money into three La Trobe funds last week. We publish ASIC’s recent announcement and its action against La Trobe.
Having researched some of the new private credit funds for Intelligent Investor, there are big discrepancies in disclosure. I hope ASIC’s review will help establish minimum reporting standards. I’d like to see sector and geographical splits as well as loan-to-valuation ratios being shown at the current stage of the project and not on completion. I’d also like to see arrears reporting and independent credit ratings from major credit rating agencies, as a start. By the way, I think La Trobe’s reporting is excellent.
Credit spreads are tight, which Arif Husain from T. Rowe Price acknowledges, but there are significant structural forces at play. This article is well worth a read.
There’s been a lot of discussion about long-dated government debt. Jamieson Coote specialise in sovereign debt, and I found Charlie Jamieson’s recent article on the steepening yield curve insightful. For example, did you know there are significant duration differences between different developed markets?
We have an article from Mawer on the debt needed to support the AI super cycle and one on NBN’s new US bond issue.
In Australian corporate bond issue news:
- Teachers Mutual raised $375m in a three-year senior floating rate deal which priced at 95 basis points over 3-month BBSW
- Port of Melbourne is taking indications of interest for a seven-year senior deal with indicative pricing of 135-140 basis points over semi quarterly swap
- UBS has raised $1.25 billion in an additional Tier 1 perpetual issue with a non-call 5 to 5.5 year period. The issue yield was 6.375%
- Air New Zealand raised $300m in a seven-year senior unsecured kangaroo at a fixed 5.179%
- Swedish Export Credit raised $550m in a senior unsecured 5.5-year deal with a 4.2% coupon
- Liberty Financial achieved record demand for a non-conforming residential mortgage backed securities (RMBS) deal of more than $3 billion, issuing $1.75 billion. Scarcity was believed to have been a factor.
Have a great week.
