World Bank Opens Kangaroo Market for 2016 After Slump Last Yearby
The International Bank for Reconstruction & Development has become the first borrower to dip its toes into Australia’s bond market in 2016 following a decline in issuance last year.
The development lender, part of the World Bank Group, is marketing a new five-year Kangaroo note, sale managers said in a statement Tuesday. It’s offering the Australian dollar-denominated securities at a yield of about 42 basis points more than the swap rate, according to three people familiar with the deal who asked not to be identified because they’re not authorized to speak publicly.
Highly rated sovereign-backed issuers such as IBRD and Germany’s KFW have historically been among the first borrowers to come to market each year, typically because they’re already well known to investors. The offering follows a slower period of issuance in 2015 which saw total syndicated bond sales in Australia fall 8 percent from the previous year, data compiled by Bloomberg show. Sales of Kangaroo bonds, notes offered by offshore-based borrowers, were down 18 percent.
The IBRD deal is being managed by Deutsche Bank AG, Nomura Holdings Inc. and Toronto-Dominion Bank. It’s expected to price in the “near future,” subject to market conditions, the managers said.