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A record start for KBN Down Under

The Kangaroo and Kauri markets got off to a strong start in 2022 and KBN was active printing its largest Kangaroo and second largest Kauri transaction. Both 5-year transactions were very received by the market, with strong participation from local investors.

28.01.2022 / Nyheter

From the first week of the year, Supranational, Sovereign and Agency (SSA) issuers have accessed the Kangaroo market one after the other, utilizing the supportive underlying market dynamics and competitive pricing to issue over AUD 6 billion in Kangaroo bonds throughout January.  For reference this compares to approximately AUD 3.2 billion for the previous 2 years combined. 

- KBN has been an active issuer in the Kangaroo and Kauri markets since 2001 and 2007 respectively. We are absolutely delighted that our continued efforts to remain active and engage the investor base in both markets, were rewarded with two fantastic trades and great participation from local investors, says Senior VP, International Funding at KBN, Evan Morgan.

KBN issued a new record AUD 500 million 5-year January 2027 benchmark and a new AUD 100 million 10.5-year August 2032 line. KBN quickly capitalized on the strong market tone, following successful mid-curve trades from Supranational issuers in the first week of the year. 

KBN saw very strong demand for its 5-year benchmark, managing to print AUD 500 million from an orderbook in-excess of AUD 600 million, whilst also tightening the pricing by 1bp throughout the process. This is KBN’s largest print in the Kangaroo market, a market in which KBN has been active since 2001. This trade follows on from the successful AUD 3-year green bond KBN printed in the Kangaroo market in the latter part of 2021. 

The new deal saw broad distribution from both domestic Australian investors (30.5%) and offshore investors (Asia 46.4%, EMEA 22.8%, Americas 0.3%) as well as broad investor distribution from Asset Managers (44.4%), Central Bank and Official Institutions (28.4%) and Banks/Bank Treasuries (27.2%). KBN followed up this successful deal, with a new AUD 100m 10.5y line, that it will look to tap over the course of the year in order to bring further size and liquidity to the line.

Final Terms

Borrower:

Kommunalbanken Norway (KBN), 100% owned by Kingdom of Norway

Ratings:

Aaa (Stable) / AAA (Stable) by Moody’s / S&P

Coupon:

1.90%, Fixed, S/A, Act/Act

Size:

AUD 500 million

Pricing Date:

12 January 2022

Settlement Date:

19 January 2022

Maturity Date:

19 January 2027

Re-Offer Spread:

S/Q coupon matched ASW + 26bps

Spread to Benchmark

0.50% ACGB September 2026 + 51.5bps
4.75% ACGB April 2027 + 47.5bps

Joint Lead Managers:

ANZ, Commonwealth Bank of Australia, Nomura International PLC, TD Global Finance

 

In the Kauri market, KBN followed Asian Development Banks successful market opening trade with a NZD 500 million 5-year February 2027 benchmark. This is KBN’s equal second largest transaction in the Kauri market and follows a record-breaking year for KBN in that market, with NZD 1.125 billion issued in 2021. 

KBN has been active in the Kauri since 2007 and the market offers KBN great investor diversification. Over the years, KBN has built a solid investor base of domestic investors and this trade also benefitted from this participation, with the majority of the bonds being allocated to New Zealand investors (76%). The remainder were allocated to EMEA accounts (14%), Asian (8%) and Others (2%). 

The deal saw 20 different investors involved with very strong participation from Banks/Bank Treasuries (51%), followed by Asset Managers (26%) and Central Banks/Official Institutions (23%).  

Final Terms

Borrower:

Kommunalbanken Norway (KBN), 100% owned by Kingdom of Norway

Ratings:

Aaa (Stable) / AAA (Stable) by Moody’s / S&P

Coupon:

2.875%, Fixed, S/A, Act/Act

Size:

NZD 500 million

Pricing Date:

21 January 2022

Settlement Date:

9 February 2022

Maturity Date:

9 February 2027

Re-Offer Spread:

MS + 21bps 

Spread to Benchmark

4.50% NZGB April 2027 +54.9bps

Joint Lead Managers:

ANZ, Commonwealth Bank of Australia, TD Global Finance

 

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