Australian bank debt in high demand as capital flees China
Australia's big banks have all raised wholesale funding in recent weeks in issues that were heavily oversubscribed. Analysts and debt market observers say it’s being driven by the same forces lifting their share prices.
A spate of recent debt raisings by Australian banks have been heavily oversubscribed, largely driven by the same forces driving their elevated share prices: a shift in capital flows away from China.
ANZ, National Australia Bank, Westpac and Bendigo & Adelaide Bank have raised debt funding of various tenors and in each case demand has exceeded the initial amount sought.
The most notable recent raising was last week with ANZ’s Euro-denominated senior unsecured deal, the largest in over a decade, according to NAB’s credit weekly. “The flow of offshore deals from the Australian major banks continued last week,” NAB said, with ANZ’s €1.5 billion 3yr FRN pricing “a strong 25 basis points inside the tighter end of the initial price talk range at a very tight Euribor+40bps”.
According to KangaNews, changing views on relative global central bank interest rate settings have created “an unusual dynamic in the euro swap curve”.
