Little enthusiasm for bond issuance

Right from the get-go, May has lived up to its reputation as being the month in which to sell, and then go away. There was turmoil in equity and bond markets globally as investors did just that, bond prices tumbled and yields blew out, and share prices followed suit.



In this environment there was little enthusiasm for bond issuance in domestic wholesale markets. May has started quieter than April finished.



Wesfarmers (rated A-) provided the only interest last week, raising a total of A$500 million for 5.5 years. Wesfarmers priced $300 million of fixed-rate notes and $200 million of floating rate notes at 90 basis points over the bank bill swap rate.

This is the first time that Wesfarmers has come to the market in more than two years and follows the maturity of a $500 million line last September.



Rentenbank (AAA) and Province of Ontario (AA-) added to existing lines.



Rentenbank added another $225 million to its January 2020 line, to take the size of the line to $1.2 billion. The increase was priced at 48.2 bps over commonwealth government securities and is the third tap since the line was opened in January.



Province of Ontario added $75 million to the August 2025 line it opened in February. The increase, priced at 69.5 bps over CGS, takes the total outstanding to $200 million.



ANZ (AA-) followed the release of its interim results with almost simultaneous issues in New Zealand and the Euromarket.

In the latter, the bank raised $200 million of tier two capital with a 12 year, non-call-seven maturity structure. The notes carry a 4.75 per cent coupon and will switch to a floating rate if not called.



Across the ditch, ANZ raised NZ$325 million for five years. The bonds were priced at 80 bps over swap to yield 4.48 per cent.