New Zealand

Westpac New Zealand drew strong support for its five year covered bond on Thursday which took advantage of the strong demand and performance identified in ANZ New Zealand’s earlier deal.

Euro covered bonds issued by ANZ New Zealand, Caffil and National Bank of Canada on Tuesday provided “the least worst option” in a spread widening environment, said bankers.

The Reserve Bank of New Zealand has unveiled the latest plank of its highly unusual approach to bank capital regulation. Under the proposed changes, the four large subsidiaries of Australian banks that operate in the country will have to raise billions of tier one capital and will be able to rely on loss-absorbing debt instruments far less than peers in other jurisdictions.

Philippine food and beverage producer and distributor Universal Robina Corp is gauging appetite among banks for a NZ$420m ($278m) loan to refinance an old borrowing used to back the acquisition of New Zealand’s Griffin’s Foods.

JP Morgan has begun an agency clearing service for Australian and New Zealand dollar denominated over-the-counter (OTC) derivatives, becoming the first OTC clearing participant on the Australian Securities Exchange (ASX) to do so.

Two €500m deals issued by Commerzbank and ASB Finance went well enough. The New Zealand deal attracted new investors and hit the issuer’s funding target. However, Commerzbank was unable to tighten pricing by much, underscoring the impression that market sentiment had deteriorated slightly.

Despite a deterioration in the affordability of housing in New Zealand, loan-to-value ratios are low and homes are comparatively more affordable than they are in much of Europe. Even though credit risks remain contained, it seems likely that spreads in the New Zealand covered bond market are set to be repriced wider.

Bank of New Zealand has chosen a covered bond as the format for a new deal, after originally announcing it would consider senior unsecured or covereds.

Bank of China (BOC) returned to the bond market with a Belt and Road blockbuster this week, raising around $3.2bn from a multi-tranche, multi-currency deal. Addison Gong reports.

New Zealand financial Kiwibank is holding non-deal roadshows in Switzerlandahead of what could be its first bond issue in Swiss francs since 2014.

China launches onshore trading for Thai baht, NPC chairman says Hong Kong remains important to China’s effort to promote the renminbi, and China Construction Bank opens a new branch in Auckland.

Hong Kong Exchanges and Clearing (HKEX) has signed a memorandum of understanding with New Zealand’s primary national stock exchange operator NZX to foster collaboration on a variety of issues.