ANZ and CBA make most of domestic debt market
Opportunities to sell term debt in the domestic market opened up late last week on terms reinforcing the spread banks need to pay to raise wholesale funds. But while this is a little wider than a few months ago it remains manageable.ANZ took the market by surprise on Thursday with an A$1.0 billion floating-rate note issue. ANZ's four-year FRNs were priced at 135 basis points over bank bills.The ANZ FRN issue came exactly a week after the CBA added $250 million to its January 2015 FRN line at 115 bps over bank bills. Then, on Friday afternoon, Commonwealth Bank launched, and priced, a mortgage-backed security through the Series 2011-1 SWAN Trust. The trust refinanced A$500 million of home loans originated through Bankwest, a subsidiary brand of CBA.The Class A1 notes totalled $365 million and were priced at 125 basis points over bank bills with a weighted average life of 2.2 years. The Class A2 notes totalled $100 million. They are five-year bullet maturity notes that will pay a coupon of 140 bps over swap.There are A$25.5 million of Class AB notes with a weighted average life if 5.1 years, priced at 250 bps over bank bills. The $9.5 million of Class B notes have a WAL of 9.5 years. Pricing was not disclosed.