A Raft Of New Bond Issues

A Raft Of New Bond Issues

There’s been plenty of new bond issuance lately. It could be institutions wanting to lock in debt after heightened uncertainty due to the Middle East conflict but could also be because they see an increased chance of a rate rise on 7 November.

It’s always good to see how institutional investors are pricing debt, so it’s well worth reading the whole list.

Corporate issuance

  • Judo Bank has just launched an inaugural Additional Tier 1 Capital Notes offer with a November 2031 mandatory conversion date.
  • Bank Australia launched a three-year senior unsecured floating rate note with price guidance of 3-month BBSW +150-155 basis points.
  • Port of Brisbane is sounding out investors on a seven-year fixed rate senior secured bond.
  • Transurban Queensland mandated a six-and-a-half-year fixed-rate bond.
  • ASX is engaging investors on a three-year floating rate note.
  • CBA raised $1.25 billion in a subordinated 10-year, non-call 5 (10NC5) Tier 2 deal. Indicative guidance was 217 basis points over swap but the deal was oversubscribed and priced 12 basis points lower at 3-month BBSW +205bps equivalent to a 6.446% issue yield. There were two tranches – $700m floating and a $550m fixed to floating tranche.
  • QBE launched a 15NC5 (15-year maturity, non-call five-year period) Tier 2 subordinated bond. Price guidance was 270 basis points over swap.
  • Woolworths issued $450m in a 7.5-year fixed rate bond that priced at 5.762%, or 135bp over semi semi-quarterly swap, tighter than the 150-155bp guidance range.
  • NBN Co sought funds from the US, raising US$1.25 billion in two tranches: US$750m over five years at UST+108bps and US$550m over 10 years at UST+143bps. Both tranches tightened by more than 20 basis points from initial guidance.

Also read: Judo Bank Capital Notes Likely to Yield over 10% p.a.

Government issuance

  • The Australian Capital Territory launched a new senior unsecured benchmark bond with a 10-year maturity date with a fixed 5.25% coupon.
  • Queensland Treasury priced a new 2036 maturity deal at 67.25 basis points over the Australian Commonwealth Government Bond (AGCB) at 5.58% issue yield. The $2 billion deal attracted offers of $3.8 billion based on tighter pricing.
  • Tasmanian Public Financing Corporation printed $800m with a 2031 maturity. Issue yield was 4.935%.
  • The Australian Office of Financial Management (AOFM), on behalf of the Australian government, printed $8 billion with just over 30 years until maturity with a 4.93% issue yield.

Note: The bonds are all issued in the wholesale over-the-counter market. Some of these bonds will be made available in small parcels from $10,000 through dealer brokers. To find a broker, see our list under the bond portfolio tab on the website.

The list above covers Monday 16 October to Tuesday 24 October and includes announcements of potential new bonds, that may not come to the market. Three-month BBSW was 4.21% as at 23 October 2023.

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Elizabeth Moran
Editorial Director
Elizabeth is a nationally-recognised independent expert on fixed income. She has more than 25 years experience in banking and financial institutions in Australia and the UK and has been published in every major Australian newspaper and investment website. Prior to becoming an independent commentator in 2019 she spent more than 10 years as the head of education and research at fixed income broker FIIG Securities. Prior to joining FIIG, Elizabeth worked as an Editor/Analyst for Rapid Ratings a quantitative credit rating agency. She also spent five years in London, three working as a credit rating analyst for NatWest Markets.