FINA Wrap – Fixed Income News Roundup – December 2019

FINA Wrap – Fixed Income News Roundup – December 2019

Each month Fixed Income News Australia provides a wrap of all the latest bond issues and changes from around Australia.

Economic data

  • RBA board keeps the cash rate on hold at 0.75%
  • Trade wars continue [Insert links]

Australian Financial Institutions

AMP announced an indicative A$200m additional tier-one (AT1) capital transaction. The deal is being marketed as 3m BBSW + 450-470 basis points, with the final margin and interest rate to be determined following a bookbuild, expected on 3 December.

CBA issued an A$1.65bn ASX listed hybrid, which was oversubscribed from the target A$750m. First call is April 2027 and mandatory exchange 20 April 2029. The floating rate hybrid has a coupon of 3m BBSW +300bps.

NAB printed a A$1.4bn 12 year, non call 7 subordinated Tier 2 bond. Final maturity is in November 2031. There were two tranches – the floating rate tranche worth A$1.175bn at 3month BBSW + 202 basis points, and the fixed at A$225m with a 3.225% coupon.

Suncorp Group announced an indicative A$250m additional tier-one (AT1) capital deal, Capital Notes 3. The notes are perpetual and have an optional conversion date on 17 June 2026 and mandatory conversion on 17 June 2028.


David Jones
NAB led a new unrated, fixed rate, six year bond deal for David Jones. They raised A$300 at a floating rate of 3 month BBSW + 375 basis points. The bond is due to mature in November 2025.

Endeavour Energy
Endeavour Energy printed A$350 million fixed rate, seven year issue maturing in November 2026 with a coupon of 2.25%. Endeavour Energy is the operator of the electrical distribution network for Greater Western Sydney, the Blue Mountains, the Southern Highlands and the Illawarra region of NSW, Australia.

Macquarie University
Macquarie University launched an A$250m dual-tranche sustainability bond. The first tranche is a fixed 10.5 year maturity with a 2.25% coupon. The second, a 25 year tranche maturing in 2044, also fixed rate paying 3.1%pa.

Mercedes-Benz Australia Pacific
Mercedes-Benz Australia Pacific issued a A$100m three year fixed rate bond with a coupon of 1.625%pa.

Naos Small Cap opportunities
NAOS Small Cap Opportunities (NSC) launched a A$30m five year fixed rate bond with a 4.95% coupon. The deal was undersubscribed and printed A$27m. NSC aims to provide investors with genuine, concentrated exposure to Australian undervalued listed small-cap companies (market capitalisation generally between $100 million and $1 billion) with an industrial focus.

NextEra Energy, Inc (kangaroo)
NextEra energy issued A$500m seven year, fixed rate green kangaroo bond with a 2.2% coupon. NextEra Energy, Inc. (NYSE: NEE) is a clean energy company headquartered in Juno Beach, Florida. It owns two electric companies: Florida Power & Light Company, which serves more than five million customer accounts and is the largest rate-regulated electric utility in the United States as measured by retail electricity produced and sold; and Gulf Power Company, which serves more than 460,000 customers in eight counties throughout northwest Florida.

Port of Melbourne
Overwhelming demand saw Port of Melbourne upsize it’s latest bond issue to A$550m. The issue matures in seven years and has a XYZ coupon.  The transaction follows a multi-tranche US$602.8 million equivalent deal in the US private placement market in April this year.

Qantas’s issued an A$425m 10 year, fixed rate bond with a coupon of 2.95%. It is the fifth corporation this year to issue 10 year debt, a sign of the growing appetite for Australian corporate bonds and the willingness of investors to commit to longer terms. The issue was oversubscribed with tenders for over A$1bn.

In a first, listed corporate bond trader, XTBs, secured $1m at first issue for retail investors. Previously, the XTB company could only provide access to individual bonds that had been available in the wholesale market for 12 months. The changing rules should see more bonds available for retail investors via the ASX.

VisionFund (kangaroo)
VisionFund International the microfinance subsidiary of World Vision, launched a five year, A$20 million Kangaroo impact bond. The deal has a 5% coupon paid semi-annually.

The proceeds of the bond will be used to provide financial services, mainly via microfinance loans, to families living below the poverty line in developing countries – in alignment with the UN’s Sustainable Development Goals (SDGs) of promoting sustained, inclusive and sustainable economic growth (SDG 8) and gender equality (SDG 5).


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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.