September opens with bond market rush
A rush of issuers hit the domestic corporate bond market last week, with ten issuers raising a total of A$3 billion. At the same time, activity resumed for September in the securitisation market and Aussie issuers were active offshore. Is it the end of the northern hemisphere summer that is responsible for the spurt in activity?The highlight last week in the domestic corporate bond market was the debut of mining conglomerate Glencore Australia Holdings Limited (rated Baa2). Glencore joins other issuers from the resources sector, such as BHP Billiton, Anglo American and BP.Glencore sold $500 million of five-year bonds. The bonds were priced at a spread of 140 basis points over swap.It seems that Glencore was after a benchmark sized issue for its market debut, rather than being intent on finessing the price.Bendigo and Adelaide Bank returned to the market with a $500 million bond issue. The bank sold $750 million of floating rate notes in May, priced at a spread of 80 bps over bank bills.This latest issue was priced at 93 bps over swap and followed the upsizing of its CPS2 hybrid issue to $250 million. The credit spread on the recent hybrids was set at 320 bps, which was at the low end of the indicated range.The Sydney branch of Bank of Tokyo-Mitsubishi (A+) and MetLife (AA-) both returned to the market, after issuing earlier in the year.In March, BoTM sold $500 million of four-year FRNs at a spread of 95 bps over bank bills. This time the bank raised $600 million for four years at 83 bps over bank bills.MetLife sold $250 million of seven-year bonds at a spread of 120 bps over swap, last week. In April, it sold $450 million of five-year bonds at a spread of 111.7 bps to commonwealth government securities.Bank Nederlandse Gemeenten (AA+) opened a new five-year line at $150 million. The bonds were priced at 74 bps over commonwealth bonds.Royal Bank of Canada returned with its second covered bond issue. RBC sold $1.25 billion of three-year covered FRNs in July last year, priced at 53 bps over bank bills. Last week it sold $750 million of five-year covered FRNs, at a spread of 57 bps over.And Province of Quebec (A+), Nordic Investment Bank (AAA) African Development Bank (AAA) and the Sydney branch of China Construction Bank (A) all added to existing lines.