Westpac

Demand for Australia and New Zealand’s first syndications of their 2020-21 fiscal year was high on Tuesday, with both issuers printing their second largest ever deals.

Australia and New Zealand launched their first syndications of their 2020-21 fiscal years on Monday.

The New Zealand treasury has appointed the banks to lead the syndication of a May 2041 nominal bond, which is expected to take place next week.

New Zealand attracted record demand for its largest ever bond as it tapped the market with a four year syndication on Tuesday. With the government facing an elevated funding programme in 2020-21 to combat the effect of the coronavirus pandemic, there is a feeling that record-breaking deal sizes will become more common a spectacle.

New Zealand hit screens on Monday morning with a new syndicated bond, its third of the 2019-20 fiscal year.

Two recent policy changes from the Reserve Bank of Australia (RBA) spurred a pair of foreign banks to scoop A$3.2bn ($2.2bn) from the bond market this week. An expansion of repo-eligibility and a term funding facility for domestic banks have freed up the funds to drive the bumper deals, according to a banker at one of Australia's big four banks.

Sumitomo Mitsui Banking Corp sold its largest every Australian dollar deal on Tuesday, scooping up A$2.4bn ($1.6bn) of senior unsecured paper through its Sydney branch.

A pair of foreign banks mandated senior unsecured Australian dollar transactions on Monday: Sumitomo Mitsui Banking Corp is out with initial price thoughts through its Sydney branch, while the Canadian Imperial Bank of Commerce is preparing a Kangaroo benchmark.

Banks are bounding back into the Kangaroo market. On Wednesday, BNP Paribas jumped in to sell the first syndicated Australian dollar senior non-preferred deal since the start of the Covid-19 crisis, later that day the Bank of Nova Scotia announced plans to join the fray with a mandate for a three year bail-inable deal.

A pair of French banks visited the five year point of the Kangaroo curve on Tuesday. BPCE raised A$650m of senior preferred paper, while BNP Paribas mandated for a senior non-preferred deal.

A quartet of SSAs borrowed a combined A$940m ($613.4m) into the Kangaroo market this week, spurring the SSA Aussie dollar market on to its best monthly volume in over nine months.

Woolworths reopened the Australian dollar corporate market with a A$1bn ($645m) dual tranche trade on Wednesday, the first from a corporate since the end of February.