Briefs: Mortgages, M&A deals run hot, ABN Amro prices kangaroo bond

Banking Day staff
  • AFG, Australia's largest mortgage broker, processed A$5.2 billion in home loans last month. That made March 2015 the biggest month in 21 years for a firm that for claims to have about ten per cent of the total market. Strong investor activity in NSW (53 per cent of all mortgages processed were for investors) and Victoria (37 per cent) drove the strong figures. The $5.2 billion figure represents a 29 per cent increase in activity on the turnover for March 2014, from a record 11,235 mortgages sold. Meanwhile, the latest national home loan approval data from Mortgage Choice shows fixed rate home are falling out of favour, comprising just 18 per cent of all loans written loans throughout March - a two year low from a high of 33 per cent.

  • The battle over bank capital continues. ANZ has warned that looming global banking reforms could result in homebuyers with small deposits facing higher prices, intensifying the big four's push for the government to stall the implementation of David Murray's financial system inquiry, reports The Australian, which also has an opinion piece where it points out that the FSI's high-level mandate is to examine how the financial system can be positioned to support economic growth. The banks, though, are more interested in preserving or improving their competitive positions — the national interest, while a consideration, comes second to shareholder.

  • Large-scale legislative change, rising equity markets and interest from US private equity groups is creating pressure for new ownership structures in Australia's mid-market financial services sector. Jeff Singh, principal and managing director of Chase Corporate Advisory, pointed to the recent surge in mergers and acquisitions among mid-tier accounting, financial advice and funds management firms as evidence of widespread structural change across the industry. Singh claimed a "pipeline" in the order of A$20 billion worth of deals where his firm has been asked to advise.

  • Yesterday, an A$225 million five-year fixed rate kangaroo bond from ABN Amro NV was priced at a coupon of 3.25 per cent and a yield to maturity of 3.355 per cent, which gave a reoffer price of 99.52 per cent. This equates to 115 bps over the semi-quarterly asset swap spread, or a margin of 150.25 bps over the April 2020 ACGB line. The issuer has been rated A (Neg) by Standard & Poors', A2 (Stable) by Moody's, A+ (Neg) by Fitch and AH (stable) by DBRS. Joint lead managers were ANZ, UBS Australia and HSBC. Settlement date is 9 April.