Foreign issuers once again a feature of the domestic bond market

At the close of business on Friday, domestic corporate bond issuance for the month of August stood at a solid A$10.6 billion, taking the year to date total to a new record of A$69.6 billion.

The domestic banks account for 53 per cent of this issuance but their share is being progressively diluted by the domestic operations of international banks and kangaroo issuers, which account for a combined 44 per cent of year to date issuance.

True corporate issuance accounts for less than three per cent of the year to date total but this may be about to pick-up. Insto reported that Woolworths and Wesfarmers are both about to undertake debt investor updates.

Woolworths has been a sporadic issuer in the domestic market. It currently has A$350 million of March 2011 bonds outstanding and first issued A$150 million of unrated, 10 year bonds in 1997.

Wesfarmers is similar having first issued A$250 million of bonds in August 2002 but has no bonds outstanding at present. Its subsidiary, Coles, has been more prolific than either its parent or Woolworths with issuance dating back to 1994, according to our records, and currently has A$400 million of July 2012 bonds outstanding.