Bank domestic capital market funding costs up on 2013
The highlight in the capital markets in the week leading up to Easter was a A$2 billion issue from Commonwealth Bank. CBA, which has a credit rating of AA-, priced $1.5 billion of floating rate notes and $500 million of fixed rate notes - both tranches at 88 basis points over the bank bill swap rate.The cost of funding for the major banks in the domestic market has increased over the past 12 months. In May last year, National Australia Bank sold $1.2 billion of five-year bonds at a spread of just 78 bps.However, CBA's pricing is better than the 94 bps Westpac paid for its $3 billion issue in February.The other significant issuer over the past couple of weeks was Suncorp, which has an A+ credit rating and issued $750 million of five-year floating rate notes priced at 110 bps over the bank bill swap rate.The Sydney branch of Overseas Chinese Banking Corporation (rated AA-) also issued in the week before Easter, adding $100 million to its March 2017 funding line. The increase, priced at 65 bps over the swap rate, took the total outstanding to $500 million.Offshore, Macquarie Bank (rated A) raised €500 million in the Euromarket for two years at a spread of 45 bps over Euribor.Last Thursday, CBA visited the Samurai market to sell ¥75 billion of give-year bonds, yielding 0.407 per cent per annum. The proceeds of the Samurai bonds convert to about $790 million.