Bond vendors upsize in narrow market

The last week of November 2014 was not notable for any great volume of issuance in the domestic corporate bond market. A lack of supply appears to have facilitated the upsizing of the deals that did come to market.

Among financial issuers, Teachers Mutual Bank (rated BBB+) made a small A$70 million issue of three year floating rate notes. The notes were priced at 105 basis points over bank bills.

The pricing is five bps wide of where ME Bank (also rated BBB+) priced its A$200 million three year issue two weeks earlier, but 15 bps tighter than Credit Union Australia's (BBB+) A$30 million tap of its December 2017 line, in the same week.   

Teachers Mutual Bank launched the deal at A$50 million, with an indicative margin range of 105 to 110 bps.

Seeking a minimum of A$300 million, Rabobank priced a $550 million tap of its September 2019 line at 80 basis points over bank bills - 6.5 bps wide of where it was quoted the day before. The increase takes the total outstanding to A$1.05 billion.

Province of Ontario added A$50 million to its August 2024 line on Friday. The increase, priced at 89 bps over CGS, takes the total outstanding to A$350 million.

ANZ New Zealand (rated AA-) sold NZ$325 million for three years, at spread of 50 bps over bank bills.

Offshore, QBE Insurance Group completed its tier two subordinated bond issue. QBE sold US$700 million of 30 year, non-call 10 bonds at a spread of 430 bps over mid-swap.

While QBE probably has a need for US dollar funding, one wonders what pricing could have been achieved in the domestic bond market. Would a listed bond issue have worked?