Two make debut in domestic bond market
Export Development Canada (rated AAA) made its debut in the domestic market last week, with a A$650 million, five-year bond issue priced at a spread of 70 basis points over Commonwealth government bonds. This is tighter pricing than achieved lately by European supranationals and agencies. KFW added to its May 2015 line later in the week, paying 83.5 bps over Commonwealth bonds for a A$700 million top-up. Outstandings are now at A$2.2 billion.National Australia Bank also made a A$100 million addition to its September 2014 fixed rate bonds, at 108 bps over swap. This is the first addition that NAB has made since the line was opened in September last year, and takes the total outstanding to A$900 million. The bonds were privately placed.The local funding arm of the Australian energy business of Singapore Power, SPI (Australia) Assets Pty Ltd, made its domestic debut last week and priced a well received deal on Friday. SPIAA had launched a minimum A$200 million, five-year bond issue earlier in the week but investor demand was such that the issue was upsized to A$500 million. KangaNews reported there was investor demand for A$600 million of bonds.The issue was priced at 185 bps over swap to yield 7.045 per cent per annum.In early July, SPI (Australia) Assets Pty Ltd (rated A-) raised 175 million Swiss francs for six years via an EMTN issue. This followed a domestic roadshow in June. Other Singapore Power group members have been active in the domestic market, with SPI Australia Finance and SPI Electricity & Gas having bonds outstanding.Non-financial institution issuance in the domestic market is now running at 5.7 per cent for the year to date. While this is well below rates in the mid-teens seen in earlier years, this latest issue should further boost the confidence of other potential corporate issuers.Finally, Reuters reported Hana Bank (rated A-), Korea's fourth largest, will be meeting with investors next week. Meetings will be held in Sydney on August 8 and 9, in Melbourne on August 11 and in Brisbane on August 12. While there has been some interest in kangaroo issuance from Korean borrowers in recent times, none has eventuated. The last Korean issuer was Shinhan Bank (rated A-), which raised A$400 million in May 2007. The bonds mature this week.