Australia/New Zealand Domestic Bond House

IFR Asia Awards 2012
4 min read
John Weavers

In a vastly improved market, one bank reinforced its reputation as the go-to arranger for Australian-dollar issuance. For the breadth and depth of its coverage, and for outperforming both local and international peers, ANZ is IFR Asia’s Australia/New Zealand Domestic Bond House of the Year.

ANZ opened the Kangaroo market for foreign corporates, was instrumental in getting Australian corporates to issue at home rather than abroad and arranged deals for corporates and financial institutions alike. It also led trades in all asset classes, including securitisations, local banks’ senior unsecured and covered bonds plus the SSA Kangaroo market.

Much of the bank’s success is attributable to its ability to identify and respond to trends early. The bank was on top of two such themes that were certain to benefit the Australian market: increased global appetite for Australian assets, and a desire to invest in new names, away from European Union financials and SSAs.

“The environment has been very supportive of credit markets with the primary one very active across every asset class, all of which are expected to hit record levels in 2012,” said Paul White, global head of syndicate at ANZ.

ANZ took full advantage of the upturn in activity in local and Kangaroo markets, following their near closures in the latter half of 2011, and was the dominant arranger with a commanding league table lead in Australian dollar-denominated bonds, including Kangaroos, ABS and RMBS.

ANZ lead managed 70 transactions worth more than A$12.3bn (US$12.8bn) for a 16.3% market share over the period under review, almost five percentage points above its closest rival, and no mean feat in a highly competitive market.

The bank was notably active in the Kangaroo market and was instrumental in opening the market for foreign corporates. ANZ secured a plum position on BP’s debut A$500m five-year Kangaroo on August 29, the first corporate Kangaroo bond since 2006.

Almost as if to prove it had opened the market, ANZ returned less than a month later as a co-lead on state-owned Korea Gas’s A$300m three-year Kangaroo, priced at 4.50%.

In fact, ANZ was unquestionably the go-to Australian dollar arranger for Korean companies. After a five-year absence, Korean financial institutions came to the market in force with Industrial Bank of Korea, Korea Finance Corp, Export-Import Bank of Korea and Shinhan Bank all issuing Kangaroos. ANZ was a lead on all of them.

The bank’s success in bringing foreign corporate issuers to the Australian market also had domestic implications. After BP’s successful deal, several top Australian issuers decided again to raise funds in their home market after a long reliance on overseas funding. BHP Billiton and Telstra were among the most notable of these.

On October 9, Sydney-headquartered global mining giant BHP Billiton raised A$1bn in its first Australian dollar-denominated bond since 2001, via arrangers ANZ and CBA.

The five-year bond marked Australia’s biggest single issue outside the banking sector. It priced 5bp inside guidance at 90bp over ASW, after the A1/A+/A+ issuer attracted an order book in excess of A$2bn.

Likewise, Telstra, which had previously favoured the euro market, returned home on November 8 with a A$750m five-year print. All of Australia’s four major banks were arrangers.

ANZ proved its credentials in the SSA market as a joint bookrunner on Kangaroos for an impressive array of clients, including KfW, EIB, the World Bank, Asian Development Bank, IFC, FMS, NIB and Export Development Canada.

ANZ was also lead on nine securitisations in the period under review (second only to NAB) for A$1.605.2bn. The pick of the bunch was Bank of Queensland’s ABS transaction in May, which included a rare sterling tranche.

The enlarged A$700m 2012-1E Reds EHP Trust securitisation of auto loans was the first Australian-dollar ABS transaction of the year.

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