FINANCIAL INSTITUTION YEARBOOK
DEC 18/JAN 19 SUPPLEMENT_VOL 13 ISSUE 110 www.kanganews.com AUSTRALASIAN FIXED INCOME: GLOBAL REACH, LOCAL EXPERTISE
INSIDE THE GLOBAL BANK SECTOR KangaNews’s first annual guide to global financial institutions, with a focus on the Australian dollar funding market
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Head of content and editor Contents LAURENCE DAVISON [email protected] ROUNDTABLE Senior content manager and deputy editor GLOBAL PERSPECTIVES HELEN CRAIG [email protected] ON BANK FUNDING Staff writer MATT ZAUNMAYR 12The international bank debt-issuance market is constantly [email protected] evolving. KangaNews speaks to funding executives from Editorial research assistant Asia, Australia, Europe, Japan and North America to get LUKE SWISS the latest on market conditions and outlook. Head of commercial JEREMY MASTERS 24_ [email protected] BNP Paribas 2 25_ Sales support officer MARKET NEWS YAZZY MCGUID Trends in the Australian financial Canadian Imperial Bank of Commerce [email protected] 26_ institution funding and capital space Commonwealth Bank of Australia including issuance timing patterns, an Chief executive 28_ Australian take on TLAC global-bank SAMANTHA SWISS , Commerzbank [email protected] TLAC issuance, Canadian bank supply 29_ and sustainability themed bank bonds. DBS Design consultants 30_ HOBRA (www.hobradesign.com) Groupe BPCE Photography 7 31_ DAVID SMYTH PHOTOGRAPHY, JULIAN Handelsbanken FEATURE WATT PHOTOGRAPHY, BEDFORD 32_ PHOTOGRAPHY (SYDNEY), TIM Stable ground Hypo Vorarlberg TURNER (MELBOURNE), THE PHOTO (WELLINGTON), DANNY STEYN Global issuance by financial 33_ PHOTOGRAPHY (MIAMI), GEORGE ARCHER institutions has been informed Landesbank Baden-Württemberg (LONDON), TIGER TIGER (AUCKLAND), 34_ STIRLING ELMENDORF PHOTOGRAPHY, in recent years by regulatory SEAN BRECHT PHOTOGRAPHY (TOKYO) requirements implemented in the Lloyds Banking Group decade following the 2008 financial 35_ Mizuho KangaNews, ISSN 1751-5548 (PRINT); crisis. The market is reaching a 37_ ISSN 2207-9165 (ONLINE), IS PUBLISHED new equilibrium, but challenges – MUFG Bank SIX TIMES A YEAR BY BONDNEWS LIMITED including macroeconomic conditions AND DISTRIBUTED FROM SYDNEY, 38_ AUSTRALIA. PRINTED IN AUSTRALIA BY and benchmark reform – remain on National Australia Bank SPOTPRESS, FOR, AND PUBLISHED BY, the horizon. BONDNEWS LIMITED, LYNTON HOUSE, 7-12 40_ TAVISTOCK SQUARE, LONDON WC1H 9LT, Rabobank UNITED KINGDOM 42_ Shinhan Bank © BONDNEWS LIMITED 2018. 19 REPRODUCTION OF THE CONTENTS ISSUER PROFILES 43_ OF THIS MAGAZINE IN ANY FORM IS KangaNews is proud to present key Societe Generale PROHIBITED WITHOUT THE PRIOR 44_ CONSENT OF THE PUBLISHER. data and information on 23 global SMFG/SMBC bank issuers active in the Australian 46_ dollar market. The issuer section Suncorp-Metway includes funding strategy information 48_ as well as corporate and debt data on TD profiled borrowers. 50_ Westpac Banking Corporation CAB average net 19_ distribution 3,262 for ABN AMRO six-month period ending 20_ SPONSORED BY: 30 September 2018. ANZ 22_ Bank of America Merrill Lynch MARKET NEWS
MARKET ANALYSIS
Timing their run: FI issuance European banks also tend to issue Australian dollars in clusters, albeit across patterns in the Australian multiple asset classes. US banks have been virtually absent in recent years due dollar market to regulations which inhibit issuance not governed by US law. More recently, The pattern of Australian dollar issuance by financial “hybrid” documentation has been institutions (FIs) since the middle of the current decade (see developed to allow Kangaroo issuance chart) indicates a number of relatively reliable execution under New York law. Two US-based windows. The timing of Australian dollar FI issuance is weighted banks – Goldman Sachs and J.P. Morgan toward the beginning and middle of each quarter while the – have successfully priced Kangaroo second half of the year sees a notable drop-off in volume. transactions in 2018. Tandon says this documentation poorva Tandon, director, billion respectively, compared with an is now well accepted by the Australian syndicate and capital markets average total volume between 2010 and dollar investor base, which should Aat TD Securities in Singapore, 2015 of A$50.9 billion. encourage further US issuers to return. says this reflects similar reporting cycles The timing of transactions by banks But, he adds, the callable feature of and blackout periods for FIs across from some jurisdictions, such as those the two recent US deals is still playing jurisdictions. He also suggests that from Korea and the Middle East, tends out and will require more work with issuance patterns demonstrate capacity to be even more clustered. Tandon says investors to support rejuvenated flow. is rarely tested in Australian dollars. this reflects the fact that these issuers FIs will have varying degrees “The concentration of issuance speaks typically have smaller deal sizes and less of engagement with the Australian to the depth of the Australian dollar frequent flow, so they tend to rely on the market, but Tandon is confident that market – on- and offshore – in its ability issuance of a national leader to refresh establishing a presence is worthwhile to support various deals from different pricing levels and re-establish demand. regardless of the size or frequency with jurisdictions in quick succession and in Once a new price point is live, peers will which an issuer might need the market. increasing volume.” likely take the opportunity to follow. “The investor work is appreciated by FI issuance in Australia has reached “Secondary trading is sometimes the buyer base and, once a presence is a new level in recent years. According limited for less frequent issuers, too,” established, issuers should be confident to KangaNews data, total volume in Tandon adds. “A national-champion in the market’s ability to support 2018 to mid-November is A$64.9 billion issuer can help reset the price level, regular benchmark issuance – including (US$47.2 billion). In 2016 and 2017, total making it easier for peers and smaller Kangaroo issuance – as a regular feature volume was A$63.9 billion and A$59.7 institutions to come to market.” of their funding plans,” he says.
AVERAGE AUSTRALIAN DOLLAR FINANCIAL-INSTITUTION ISSUANCE, 2015-2018 YTD
Domestic Kangaroo EMTN/GMTN 3,500
3,000
2,500
2,000
1,500
1,000
ISSUANCE VOLUME (A$M) VOLUME ISSUANCE 500
0 Week 1 Week 1 Week 1 Week 1 Week 1 Week 1 Week 1 Week 1 Week 1 Week 1 Week 1 Week 1 Week 2 Week 3 Week 2 Week 3 Week 2 Week 3 Week 2 Week 3 Week 2 Week 3 Week 2 Week 3 Week 2 Week 3 Week 2 Week 3 Week 2 Week 3 Week 2 Week 3 Week 2 Week 3 Week 2 Week 3 Week 4 Week 4 Week 4 Week 4 Week 4 Week 4 Week 4 Week 4 Week 4 Week 4 Week 4 Week 4 January February March April May June July August September October November December
SOURCE: TD SECURITIES NOVEMBER 2018
2|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 SECTOR ANALYSIS
for the majors should have a manageable Australian dollar tier-two cost impact. The regulator says: “The proposed changes are expected to capacity could be set for a test marginally increase each major bank’s cost of funding – incrementally over Australia’s big-four banks could triple their issuance of tier- four years – by up to 5 basis points based two instruments to meet the local equivalent of a total loss- on current pricing. This is not expected absorbing capacity (TLAC) regime, according to the Australian to have an immediate or material effect Prudential Regulation Authority (APRA). on lending rates.”
he Australian regulator proposed absorbing capacity that is simple, flexible ISSUANCE VOLUME an updated capital-adequacy and designed with the distinctive features The volume of issuance required will Tregime on 8 November, of the Australian financial system in be significant, however. The big four suggesting tier-two will carry most of the mind”. will need an aggregate additional A$70 weight of a 4-5 per cent increase in total In practice, this means two things: billion (US$50.7 billion) of capital over capital requirement for the majors. increasing the total capital requirements the next four years, based on current The proposed capital update is not of the big-four authorised deposit-taking balance-sheet size, to meet the proposed strictly an Australian TLAC regime, institutions (ADIs) and allowing the changes. as TLAC is only required of global increase to be filled with any form of If a significant proportion of this systemically important banks under capital. new supply is targeted at the Australian international regulatory standards. APRA expects the majors to lean on dollar market it would mark a major However, market participants have the cheapest-to-issue form of capital to step-up in tier-two issuance volume in long expected APRA to introduce bridge the gap to the new requirement. the currency. The big four have settled an “ALAC” standard for Australia’s It says: “As ADIs will be able to use any into a routine of issuing not much more domestic systemically important banks – form of capital to meet increased total than A$1 billion of tier-two securities specifically, the four majors. capital requirements, APRA anticipates each per year, with at least half issued in Unlike most global TLAC systems, the bulk of additional capital raised will foreign currencies. APRA is not at this stage proposing be in the form of tier-two capital.” The Australian dollar market effectively to introduce a new instrument This would mean the big four has proved relatively receptive to by bifurcating senior debt into securities increasing their issuance of tier-two international banks’ tier-two issuance subject to bail-in and others that are not. securities to 6-7 per cent of risk-weighted – from both Kangaroo and, more Nor is it – as is the case in Canada – assets by the proposed implementation frequently, EMTN programmes – but proposing that all senior debt should be date in 2023, from roughly 2 per cent at the combined market is still significantly subject to bail-in. present (see chart 1). smaller than might be required to Instead, an APRA statement says it APRA is also convinced that an fulfil the potential future needs of the is aiming to deliver “an approach on loss- increased aggregate tier-two requirement domestic majors (see chart 2).
CHART 1. PROPOSED CHANGE TO AUSTRALIAN MAJOR BANKS’ CHART 2. AUSTRALIAN DOLLAR TIER-TWO ISSUANCE CAPITAL STRUCTURES Australian ADI International bank Common equity tier-one AT1 T2 4,500 Capital conservation buffer Capital surplus 20 4,000
18 3 3,500 1,150 16 2,100 3.5 3,000 14 3 2,500 12 875 10 2,000 300 3.5 6-7 8 1,500 2 (A$M) VOLUME 2,853 6 2,090 1.5 1.5 1,000 1,775 1,808 4 PROPORTION PROPORTION OF RISK- 2 4.5 4.5 500
WEIGHTED ASSETS WEIGHTED (PER ASSETS CENT) 0 0 Current Proposed 2015 2016 2017 2018 YTD
SOURCE: KANGANEWS 23 NOVEMBER 2018 SOURCE: KANGANEWS 23 NOVEMBER 2018
3 MARKET NEWS
SECTOR ANALYSIS MARKET INSIGHTS
TOM IRVING TD SECURITIES Australian dollar “Investors understand simmers for global TLAC that issuers are dealing with a raft of compliance issuance issues with this asset class. A domestic-format There is no Australian equivalent of a total deal might be preferable loss-absorbing capacity (TLAC) regime, and but at this stage local investors understand even when one is implemented it does not where issuers are coming from and are not currently appear that it will create a new type demanding it.” of additional-capital security (see p3) as has SEAN ROGAN been the case in most global jurisdictions. This WESTERN ASSET MANAGEMENT has not stopped international banks issuing There could be a notable TLAC-compliant senior debt denominated in increase in off-benchmark Australian dollars (see chart). issuance from offshore o mid-November 2018, most Australian dollar TLAC financials. We like these deals from global banks have been in EMTN format. deals because they are THowever, a growing cohort of issuers is taking the typically issued at a further step to Kangaroo documentation for Australian dollar generous level relative to offshore curves, they TLAC deals. This includes some US banks, which require don’t come to the Australian market all that hybrid documentation to issue in foreign domestic markets. often and issuance off global programmes While EMTN transactions do not typically attract the doesn’t seem to have impeded the bookbuild maximum possible participation by Australian-domiciled processes so far.” investors, issuers have tended to report positive responses to PHIL MIALL their Australian dollar TLAC issuance including contributions QIC from Australian accounts in the 20-50 per cent range. “We have a meaningful So far, issuers appear happy with the outcomes they are getting when issuing TLAC-compliant paper off global allocation to TLAC in our programmes – even though issuers and intermediaries funds, which is for the acknowledge that buy-side familiarity with the product is most part allocated to evolving. Whether more of this type of issuance will migrate to domestic major-bank the Australian domestic market remains an open question. subordinated debt – but we could switch out of this should we see AUSTRALIAN DOLLAR TLAC-COMPLIANT SENIOR ISSUANCE other attractive issues. Our future interest in BY ISSUER/PARENT ORIGIN offshore bank TLAC deals will be dictated by
Europe Japan US UK the value we think is on offer and our views 2,500 around the fundamentals of the issuer and jurisdiction.” 2,000 650 ROLAND CHARBONNEL GROUPE BPCE 1,500 1,000 “Demand for our latest 1,700 750 750 Australian dollar senior- 1,000 nonpreferred tranche,
VOLUME (A$M) VOLUME 625 1,000 1,450 625 with 10-year duration, 500 800 750 was driven by Japanese 500 550 450 325 224 330 life-insurance investors. 0 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18* It is also a standard * Q4 18 data to 23 November. maturity for BPCE’s issuance of senior SOURCE: KANGANEWS 23 NOVEMBER 2018 nonpreferred.”
4|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 COUNTRY ANALYSIS
Canadian banks’ Canada’s decision to plump for a total loss-absorbing capacity system that makes all senior debt subject to bail-in – longstanding Australian while Australia seems to be heading towards leaning on tier-two supply to bolster additional capital (see p3) – could create an market connection uneasy divergence of deal format for banks in the two countries. But most market users are confident that Canadian banks will continues continue to be familiar faces in Australian dollar issuance. Canadian banks have been a reliable source CANADIAN BANK ISSUANCE IN THE DOMESTIC of supply to the Australian dollar market since AUSTRALIAN DOLLAR MARKET the financial crisis, initially focused mainly on covered bonds but increasingly in recent Covered bond Senior unsecured 7,000 years in senior-unsecured format (see chart). The Australian market has proved fruitful for 6,000 Canadian issuers both via local branches and 5,000 in Kangaroo format. 4,000 6,600 3,000 1,500 3,445 hen it comes to Australian dollar issuance by 4,600 VOLUME (A$M) VOLUME 2,000 3,185 nondomestic banks, Canadian issuers stack up with 2,300 any other global region in total issuance and comprise 1,000 1,750 1,750 W 750 900 400 0 comfortably the largest single-nation supply source. They 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD provide the same amount of Australian volume as non-Japanese SOURCE: KANGANEWS 23 NOVEMBER 2018 Asian issuers as a whole and almost as much as Europeans.
MARKET INSIGHTS
EDWARD ARDEN PETER LEVITT TD SECURITIES CANADIAN IMPERIAL BANK OF COMMERCE “I would be somewhat “The Australian market is concerned if the Australian attractive. It is a disciplined market moves towards a and well-developed part nonpreferred structure, of the world in which to as Canada has adopted issue. It has been a gap in a bail-in approach – and our portfolio, so to speak, Australian and Canadian banks have mutually for some time but it is a gap that we intend to benefited in their global execution ability from close.” being able to point to similarities with each MICHAEL SCHECHTER other.” TD BANK
BARBARA HOOPER TD BANK “We will execute deals that don’t have clear relative “My favourite quote is value so we have those ‘Canada is like a cold markets available to us Australia’. But the should we need them. resemblance is remarkable In theory, paying a little more if you consider that both in one market alleviates pressure on spreads in jurisdictions are resource- another. Perhaps it creates value in and of itself.” based, have a similar concentration in the banking industry and similarities in their housing markets and legal systems.”
5 MARKET NEWS
SECTOR ANALYSIS MARKET INSIGHTS
EVA ZILELI NATIONAL AUSTRALIA BANK Bank sustainability “Price tension on green market in Australian notes really comes from having dedicated green dollars remains a asset-backed investors with specific demand for domestic affair these assets. We need So far, the only banks to have issued more supply in Australia for investors to sustainability-themed bonds denominated justify establishing specific green funds – in Australian dollars have been domestic especially for securitisation.” institutions – just one of the reasons why deal MOSTYN KAU volume has yet to catch fire (see chart 1). ANZ BANKING GROUP One positive sign is the conduciveness of the “It’s right to describe this Australian dollar market for high-grade issuers, as a developing space, and including to global supranational, sovereign as market participants and agency names (see chart 2). become more aware of environmental and social CHART 1. AUSTRALIAN DOLLAR SUSTAINABILITY-THEMED concerns it will get bigger BANK ISSUANCE both from an asset perspective and on the
National Australia Bank ANZ Banking Group bond-market inflow side. We will meet the Westpac Banking Corporation Teachers Mutual Bank demand from investors, because it naturally Commonwealth Bank of Australia Bank Australia makes sense to match the two sides of the 1,400 balance sheet.” 1,200 ALEX BISCHOFF 1,000 WESTPAC BANKING CORPORATION 650 800 “As banks, we have a
600 125 responsibility to drive 100 100 600 this market but also to be VOLUME (A$M) VOLUME 400 220 500 conscious of how quickly 200 300 500 300 it is evolving. Things are 0 2014 2015 2016 2017 2018 YTD changing all the time,
SOURCE: KANGANEWS 23 NOVEMBER 2018 and we don’t want to commit ourselves to something that will become redundant in CHART 2. AUSTRALIAN DOLLAR SUSTAINABILITY-THEMED ISSUANCE future.” BY SECTOR KYLIE ROBB COMMONWEALTH BANK OF Domestic semi-government Global SSA AUSTRALIA Bank unsecured Securitisation Corporate “We have communicated 6,000 to investors that we want a 250 5,000 381 robust, sustainable green 345 asset class. In addition to 4,000 450 identifying eligible assets, 2,755 3,000 50 this involves ongoing 1,250
VOLUME (A$M) VOLUME 2,000 monitoring and reporting as well as validating 50 945 and separately auditing those assets. The 1,000 1,800 600 600 300 600 55 750 feedback we have received, especially from the 0 300 300 2014 2015 2016 2017 2018 YTD international investor community, is that this
SOURCE: KANGANEWS 23 NOVEMBER 2018 approach has long-term value.”
6|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 FEATURE Stable ground Global issuance by financial institutions (FIs) has been informed in recent years by regulatory requirements implemented in the decade following the 2008 financial crisis. The reshaping of banks’ capital structures is now largely complete in most jurisdictions and the market is reaching a new equilibrium. But challenges – including macroeconomic conditions and benchmark reform – remain on the horizon.
BY MATT ZAUNMAYR
he financial-crisis fallout led to regulators around ISSUANCE TRANSITION the world implementing reforms to ensure ccording to KangaNews data, more than A$9.5 billion systemically important banks’ stability. Most (US$6.9 billion) of FI Kangaroo deals priced in 2018 recently, total loss-absorbing capacity (TLAC) has Ato the end of October (see chart 1). This is close to the T been implemented in North America and Europe, post-financial-crisis record year of issuance: 2014, when A$9.9 the goal being further to enhance banks’ ability to handle future billion was issued by FIs in Kangaroo format (see box on p8). liquidity crises without requiring government support. While Kangaroo issuance by FIs is still short of the totals Global banks have issued a large volume of new debt, often racked up prior to the crisis – at least A$12 billion came to market in new formats, to meet TLAC requirements. TLAC comprises in every year from 2005 to 2007 – Kangaroo issuance no longer instruments that can be written down or converted to equity if represents the entirety of the Australian dollar market for global required. This includes existing capital instruments like common banks. equity, and additional tier-one and tier-two securities. But it also Senior-nonpreferred and tier-two Australian dollar adds long-term unsecured debt with a minimum residual maturity transactions, originally in EMTN format, have proved to be of more than one year and which is subordinated to liabilities that a fruitful diversification avenue for international FI issuers, are explicitly excluded from TLAC. including more than A$3 billion of such flow in 2018 (see table). The way specific jurisdictions have gone about regulating These deals have tended to attract support from Asian investors. this new layer of capital – between existing capital instruments Yuriy Popovych, Singapore-based director, origination and non-TLAC-compliant senior debt – has created a clutch of and syndication at TD, says regulatory change initially sparked different issuance types. a degree of uncertainty among investors and borrowers, In the US and UK, banks have increased issuance from particularly when it came to cross-border deal flow. holding company, as opposed to operating company, entities However, he tells KangaNews: “There is now more clarity on to create differentiation between TLAC and non-TLAC senior what each regulatory regime looks like. Most investors have been bonds. In Europe, new products – senior preferred and senior quick to react to changes and have been able to get approvals nonpreferred – have been established. In Canada, all senior paper for participation in new products. Issuers are now much more with term of more than 400 days is now subject to bail-in laws comfortable reaching out to offshore investor bases.” and therefore TLAC-compliant. Husain says the sheer volume of senior-nonpreferred and Asad Husain, London-based vice president, European FIG holding-company issuance banks have required has given global origination at TD Securities (TD), says, as a consequence, banks investors sufficient incentive to become comfortable with the have been seeking more funding from offshore markets as they look for “Whether banks issue in an offshore market diversity in their reshaped and swap back to SONIA or UK LIBOR is an books. The Australian dollar ongoing discussion. It is something a lot of market has undoubtedly been banks are looking into currently.” a beneficiary of this trend, he tells KangaNews. ASAD HUSAIN TD SECURITIES
7 FEATURE
AUSTRALIA’S TWO-WAY FLOW Australia’s four major banks have been very active issuers in global markets, particularly in US dollars. Like their global peers, though, the Australian banks saw their aggregate funding requirements decline this year at the same time as pressure built in the form of rising spreads, market volatility and fallout from the local banking royal commission. Meanwhile, like most of senior-unsecured issuance from institutions (FIs) – in true According to KangaNews data, the biggest global banks the Australian major banks. Kangaroo format, in other words there have been 14 different the Australian majors have excluding other Australian international FI borrowers in the now largely completed their Tandon tells KangaNews that dollar programme types and Kangaroo market in 2018 to the post-financial-crisis capital while some investors are issuance by Australian branches end of October, including two transition. “The funding task asking more questions about of global banks – is tracking new borrowers – Qatar National is much more manageable for the Australian banking sector at a decade-long record Bank and Banque Fédérative the Australian major banks,” than they have in the past, level in 2018 (see chart 1). du Crédit Mutuel. The diversity says Apoorva Tandon, director, investors are also generally of countries represented in syndicate and capital markets aware of reduced expected Yuriy Popovych, director, Kangaroo issuance is in fact at TD Securities (TD). issuance volume from the origination and syndication higher than at any point since sector and have adjusted their at TD, says with interest the financial crisis (see chart 2). Illustrating the point, Tandon expectations accordingly. rates rising in other markets, highlights the fact that the the Australian dollar is The Australian dollar market third quarter of 2018 was the Meanwhile, issuance into the currently providing attractive has been an attractive source first period in recent history in Australian domestic market pricing which brings it into of diversification for many FI which there was no US dollar by international financial play for many issuers. borrowers in recent years.
CHART 1. KANGAROO FI ISSUANCE BY ASSET CLASS CHART 2. KANGAROO FINANCIAL INSTITUTION ISSUERS
Returning issuers New issuers Countries Senior T2 Covered bond (LHS) (LHS) represented (RHS) 12,000 16 10 9 14 5 9 10,000 8 2 8 8 1,750 1,150 12 2 2 7 8,000 7 10 1 10 10 10 6 900 750 9 6,000 1,750 875 20 8 4 5 6 4 4 4,000 8,175 8,405 4 12 3 6,000 4 3 5
5,307 NUMBER OF ISSUERS TOTAL VOLUME (A$M) 4,975 2 2,000 1,150 NUMBER OF COUNTRIES 2 3 1,650 1 0 0 0 2013 2014 2015 2016 2017 2018 YTD 2012 2013 2014 2015 2016 2017 2018 YTD
SOURCE: KANGANEWS 31 OCTOBER 2018 SOURCE: KANGANEWS 30 OCTOBER 2018
products. The fact that national regulatory regimes have taken Canadian and US dollars. TD’s market intelligence is that some different approaches to TLAC implementation, however, has investors, particularly in Asia, are yet to commit to the new form created adaptation periods for global investors as buy-side of senior debt. participants in one jurisdiction familiarise themselves with new However, according to Apoorva Tandon, director, syndicate issuance formats from another. and capital markets at TD in Singapore, investors coming to grips Canada is the most recent jurisdiction to implement TLAC. It with Canada’s regime should only be a matter of time – especially has taken a different approach to its main peers, in that all senior given the fundamentally straightforward nature of the regulatory debt with a maturity of more than 400 days from its systemically approach. important financial institutions will now be subject to bail-in if Demand for the two transactions priced since the the need arises. In effect, all senior term debt issued by Canadian implementation of the regime – both by Royal Bank of Canada banks will be TLAC-compliant – there is no separation on a (RBC) – was seemingly strong. Popovych reveals that the deals holdco-opco or senior preferred-senior nonpreferred basis. priced tight to RBC’s legacy notes – which are not subject to the Canada’s new rules came into effect on September 23 and bail-in regime – despite their subordination. He adds, though, that supply from its major banks took a month to resume – in the differential between new and legacy debt is likely to widen
8|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 INTERNATIONAL-ORIGIN FINANCIAL INSTITUTION AUSTRALIAN The large bid coming from There have also been several DOLLAR EMTN DEALS 2018 Asian investors has provided Australian dollar transactions PRICING ISSUER VOLUME ASSET TENOR a particularly strong tailwind. from international FIs in EMTN DATE (A$M) CLASS (YEARS) format in 2018. The majority 18 Jan 18 Deutsche Bank Sydney 450 Senior 5 Popovych says it is important of these have been tier-two Branch nonpreferred for issuers to understand or senior-nonpreferred deals 2 Mar 18 Credit Suisse Group 300 Senior 6NC5 that when they undertake targeted at Asian investors, 8 May 18 Landesbank Baden- 250 T2 10 an Australian dollar though some domestic bid has Württemberg transaction they are likely also been present in this flow. 11 Jul 18 Mizuho Financial Group 625 Senior 5 to find themselves placing a 18 Jul 18 Zurich Finance Australia 250 Senior 20 large portion with accounts The emergence of alternative 17 Aug 18 Landesbank Baden 200 T2 10 outside Australia. He adds issuance formats to the Württemberg that while rising rates in domestic Australian Kangaroo 20 Aug 18 Commerzbank 225 T2 10 the US may result in some programme that dominated 13 Sep 18 Societe Generale 550 Senior 5 & 10 offshore allocation away from prior to the financial crisis has nonpreferred Australian dollars, the recent led some market participants 5 Oct 18 BNP Paribas 275 T2 15NC10 cheapening of the Australian to question the long-term value SOURCE: KANGANEWS, TD SECURITIES 31 OCTOBER 2018 dollar and an ongoing need for of Kangaroo issuance for FIs. diversification should ensure a during which investors favoured the legacy old-style notes that healthy bid from Asia remains. The fact that US regulation now effectively precludes were already on issue over issuance of new-style, explicitly loss- Amid the bouts of volatility in local banks from issuing in the absorbing securities. 2018, though, Tandon says Australian domestic market TD’s perspective is that wariness of the new format of the domestic investor base only adds to the weight of Canadian issuance, particularly on the part of Asian investors, has proven very constructive this question. US banks have may be no more than a consequence of the large volume of for international borrowers. been quiet in Australian He identifies Korean policy- dollars in 2018, but when subordinated issuance that has come to markets in recent years and bank issuance, transactions they do issue it will likely be rather more volatile market conditions in 2018. These two factors priced by Canadian banks and weighted towards global are promoting a clear preference for senior deals in the region. Svenska Handelsbanken’s programmes, supplemented Popovych says: “We have been hearing from investors in A$900 million (US$652 by alt-doc Kangaroo deal flow. million) Kangaroo deal as recent months that they have a preference for senior paper, among those that have been However, Popovych says while and we have been seeing much stronger bids for super-senior particularly well supported by it may be easier to issue off structures and operating-company issuance.” Australian domestic accounts. international documents, There may yet be an ongoing impact on demand patterns, setting up a Kangaroo “Australian investors are programme is still the best however. Even if a structural bid for super-senior paper remains motivated to diversify to way for issuers to achieve in place, the nature of the various regulatory approaches to TLAC address concentration risk long-term gains through means supply of this type of paper will inevitably be reduced as in their portfolios. There is domestic investor engagement some or all gets diverted to TLAC-compliant formats. Canadian an intentional shift toward in Australia. For strategic banks will arguably not have any facility to provide super-senior more diversified holdings, issuers eyeing a long-term which the FI issuers have relationship with the market, supply, for instance, while the bifurcation of issuance from other been nimble in response to,” the Kangaroo approach is sources means what was all senior-unsecured supply will in future Tandon tells KangaNews. likely still the optimal one. lose some volume to deals with TLAC alignment. “It is increasingly evident that banks from jurisdictions either without a bail-in regime or with senior-preferred issuance needs naturally going forward as legacy notes mature and start trading are becoming ever-more scarce,” says Tandon. based on technical factors. EQUILIBRIUM SETTING SENIOR SCARCITY n the other hand, the decade-long regulatory focus on n the fullness of time, investors that want exposure to bank stability, and the latest requirements implemented, Canadian bank credit will have to accept bail-in bonds. Omean there is now a high degree of clarity on what future IHowever, for the time being some pockets of demand global bank supply will look like. maintain a preference for the old-style Canadian senior debt, Despite the fact TLAC requirements are yet to be universally according to Tandon. implemented, Husain says it feels like an equilibrium has been Several of Canada’s major banks accessed Australian dollars reached for banks and their regulatory requirements. Even in in senior format in the months leading up to the implementation those jurisdictions awaiting TLAC or equivalent implementation – of the bail-in regime, and all these deals were reportedly well like Australia – banks now hold much more capital than they did oversubscribed. This mirrors the evolution of Basel III-compliant prior to the financial crisis. This means the heavy lifting on capital tier-two securities in Australia, which featured a transition period is likely largely played out as a global phenomenon.
9 FEATURE
would not be surprising if more as the ECB withdraws its ASSETS REVISITED start to enter the Australian support from euro covered dollar market too,” says Husain. bonds. The US dollar covered- While issuance in new asset classes has been bond market this year is driven by regulatory requirements in recent Covered bonds is currently heavily undersupplied, an attractive proposition, but it makes economic years, ongoing market volatility and lower according to Apoorva Tandon, sense and offers genuine funding requirements could see financial TD’s director, origination and investor diversification.” institutions re-energise their activity in some syndicate. “The covered-bond previously unloved asset classes. investor base is an important Tandon says the move to source of funding, especially diversify product applies European and UK-based However, according to Asad in a more challenging market to Australian banks as well. banks have been well Husain, vice president, backdrop. In an Australian However, with a reduced served by their respective European FIG origination dollar context, the covered funding task across the domestic issuance markets at TD Securities (TD), the shelf gives international sector issuers will likely in recent years. Capacity gradual end of the Bank issuers access to investors be looking at their funding in Europe was significantly of England’s total funding with repo-eligibility criteria options with a net-interest- deepened by central-bank scheme and European Central that don’t participate in other margin focus. “With the asset-purchase schemes. QE Bank (ECB)’s QE programme senior-unsecured funding.” backdrop for senior debt programmes have sucked up means issuers are looking to issuance more challenging the large majority of secured increase and diversify their Tandon adds: “Internationally, and investors exhibiting more issuance – covered bonds and secured funding needs. we very much like the US price sensitivity, covered securitisation transactions – in dollar covered-bond market bonds should be getting close recent years, with little finding “New issuers are entering the at the moment and can see consideration in funding plans,” its way into the open market. US dollar secured market and it it playing an important role Tandon tells KangaNews.
“We are approaching a steady state in which banks are aware The search for alternative base rates is gathering momentum of how much capital issuance they need to do on an ongoing in the US, the UK and Europe with deals off new benchmarks basis. It is now a matter of banks refinancing their existing coming to market from supranational, government and FI senior-unsecured debt with either senior-nonpreferred or holding- borrowers. But such issuance is the exception so far and there company issuance,” says Husain. are still significant challenges for issuers and investors adapting to Popovych tells KangaNews that, going forward, the focus will new benchmarks. shift to using capital efficiently and optimising the cost of capital In the UK, the Bank of England (BoE) and the Financial funding. “Now that banks from a number of jurisdictions have Conduct Authority have been working to encourage a transition had several reporting periods to familiarise their balance sheets from UK LIBOR to the sterling overnight index average with their resolution regime, we see the next 12 months as an (SONIA) reference rate. opportunity to optimise their capital stack.” According to a white paper released by the Working Group Tougher scrutiny on banks though, is not likely to abate any on Sterling Risk-Free Reference Rates in June 2017, SONIA was time soon. One needs to look no further than Australia’s banking chosen because of its long-term viability, its simplicity and the royal commission to see what the ramifications for a lack of fact it is already in use as the reference rate for sterling overnight oversight on bank behaviour can be. The fallout is the spectre of indexed swaps. further regulation. However, the market expectation in late 2018 In the US, the Alternative Reference Rate Committee revealed seems to be that if this comes to pass it will likely not have its most the secured overnight financing rate (SOFR) as its preferred significant consequence in the funding or additional-capital arenas. alternative rate to US LIBOR in March 2018. SOFR is a new reference rate published by the Federal Reserve Bank of New York REFERENCE-RATE REFORM and based on transactions in the US Treasury repo market. n equilibrium may well be settling on FIs’ capital Elsewhere, Japan has adopted the Tokyo overnight average requirements, but this does not mean the global bank rate to transition away from yen LIBOR. In Switzerland, Aborrowing landscape is without challenges. The move SARON, a collateralised rate based on the Swiss repo market, away from interbank lending rates as a pricing benchmark is has been selected. And the European Central Bank (ECB) is perhaps the most significant one facing issuers in late 2018. developing a euro unsecured overnight index rate, set to be This was precipitated by the increasingly moribund nature finalised before 2020. of many underlying bank-bill trading markets and regulators’ The change to alternative reference rates will likely permeate decisions no longer to require banks to submit notional interbank deep into FIs’ operations, given their lending is currently lending rates. In the absence of these submissions, there will be no priced off interbank benchmarks. The transition will not basis on which to derive the interbank offered rates (IBORs) that be straightforward, as the new reference rates have several are used as pricing reference for global credit issuance. fundamental differences to the existing IBORs. The new rates do
10|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 not include any credit or term premia, for instance, while some – including “It is increasingly evident that SOFR in the US – are secured. IBORs banks from jurisdictions either show a price for unsecured credit over a without a bail-in regime or with time period. senior-preferred issuance needs are How global banks manage the change is undoubtedly top of the becoming ever-more scarce.” agenda for many institutions. As well as APOORVA TANDON TD SECURITIES transitioning their new issuance they will have to solve for legacy paper priced off reference rates that will major banks included – is that their capital overhaul, and likely cease to exist in the next year or two. consequent new-issuance requirement, was concurrent with It will of course take time for markets fully to adopt the use a period of expansionary monetary policy around the world of alternative reference rates. But Husain says the transition for which saw institutions like the European Central Bank (ECB) issuers and investors is well underway, particularly in the UK. become large buyers of FI credit and generally benign liquidity In fact, Lloyds Banking Group (Lloyds) became the first and pricing conditions. commercial bank to issue using SONIA as a reference rate in Interest rates are now rising in the US and the gradual September, when it priced a £750 million (US$978.8 million) unwind of QE in Europe continues. But banks also find covered-bond transaction. Supranational agencies often take a themselves in a position where, with much of the heavy lifting lead in debt-market innovation, and the European Investment on capital requirements complete, they can be more selective Bank and World Bank priced SONIA-linked transactions before with issuance. This does not mean the value of funding and after Lloyds, respectively. diversity has fallen, though. “The market is transitioning to a SONIA-only format, and In fact, it might be even more important given the bouts of investors are also doing the work internally to be ready for it,” volatility that have hit credit markets at various stages throughout says Husain. 2018. “There was a long period of relatively low volatility in credit Similarly in the US, Fannie Mae, World Bank, Credit Suisse markets which has now clearly ended. Issuers will be looking at and MetLife have already issued debt linked to SOFR. However, the most cost-effective way to address their funding requirements Husain says the US is playing catch up with the UK. This is less and those that can be nimble in accessing different markets and surprising in light of the fact that SOFR is an entirely new rate pockets of demand will fare well,” says Popovych. whereas SONIA was already well established. The necessity of expanding into new markets to address the Husain says the derivatives part of the equation in particular large funding requirements of recent years should help borrowers is not quite as evolved for SOFR as it is for SONIA. Tandon be responsive to demand, given many have now established adds: “The SONIA swap market is quite well developed. It relationships and programmes across the world. has been around for a long time and the liquidity around the Husain says issuers in the UK and Europe are well prepared instrument is considerably different from the SOFR market, for the QE unwind, given the BoE and ECB have telegraphed which did not exist six months ago.” their moves well in advance. He adds that the result has been Rapid progress is being made, though. Tandon says one an adjustment to funding-programme volume and an increased of the key hurdles for SOFR was hedge accounting. Approval desire from issuers to diversify their secured funding sources (see of SOFR for hedge accounting by the Financial Accounting box on facing page). Standards Board was expected in December 2018, but instead Despite potentially higher funding costs, Tandon points was delivered in late October. Tandon says this will allow more out that rising rates and tax reform in the US could be net- issuers and investors to transact securities linked to the SOFR interest-margin and earnings positive for banks operating there. rate. Furthermore, Popovych says it is likely that as spreads pick up How the use of alternate reference rates affects cross-border and become more attractive investors that have been precluded issuance from FI borrowers remains to be seen. “Whether banks from FI credit will come back into play. • issue in an offshore market and swap back to SONIA or UK LIBOR is an ongoing discussion. It is something a “Most investors have been quick to lot of banks are looking into currently,” react to changes and have been able to says Husain. get approvals for participation in new products. Issuers are now much more MACRO UNCERTAINTY comfortable reaching out to offshore ne way in which global FI investor bases.” borrowers have been fortunate Oin the past decade – Australian YURIY POPOVYCH TD SECURITIES
11 ROUNDTABLE
GLOBAL PERSPECTIVES ON BANK FUNDING he international bank debt-issuance market is constantly evolving, with the emergence of total loss-absorbing capacity (TLAC) and renewed T volatility among 2018’s most notable developments. KangaNews speaks to funding executives from Asia, Australia, Europe, Japan and North America to get the latest on market conditions and outlook.
PARTICIPANTS n Peter Green Head of Senior Funding and Covered Bonds LLOYDS BANK n Brooke Hales Associate Vice President, Treasury and Balance Sheet Management TD n Atsushi Ouchiyama Senior Vice President, Debt Strategy and Issuance Group SUMITOMO-MITSUI FINANCIAL GROUP n Hong Nam Yeoh Head of Wholesale Funding DBS n Eva Zileli Head of Group Funding NATIONAL AUSTRALIA BANK
FUNDING CONDITIONS is very positive for investors and therefore it is good for them to have Japanese paper when constructing portfolios. KangaNews How are issuers finding n YEOH I think the point about Japanese bank spreads conditions in global markets at the moment? highlights the fact that markets are currently very differentiated. Specifically, what has happened to spreads Some names are struggling to get to market while others are still over the last 12 months and have liquidity able to do so, albeit with more difficulty than last year. conditions changed? I suspect this is to do with how a credit is positioned. n HALES Year to date, TD has raised almost C$40 billion Issuers tend to occupy a certain niche in the minds of investors, (US$30.4 billion) across five currencies and three platforms – and if that niche is attracting interest issuance should be senior, covered bonds and asset-backed securities. possible. Sometimes there is no control over which niche We have found liquidity to be quite strong. Until recently, investors will place an issuer in, and if you happen to be in one spreads have been very consistent – for example, covered-bond which is being looked at less favourably it can be challenging. new-issue levels for most tenors are within 5 basis points of Investor concerns are very region-specific. In Asia, where they were in early January 2018. For our Canadian senior investors are looking at the US-China trade war with a lot of bonds, the introduction of bail-in from 23 September makes concern. In Australia, investors are focused on the outcome of it a bit tricky to compare spreads at the start of the year with the banking royal commission. In Europe, they are concerned spreads today. with Italy, and in the UK they are concerned with Brexit. n OUCHIYAMA We feel issuers have to face headline risk when US investors tend to be a bit more sanguine at the moment, they decide to jump into the market, and therefore choosing primarily because the economy is performing well and the right day to execute is increasingly important. president Trump seems to be getting his way in a lot of areas. As for spreads, Japanese paper typically holds well and Investors therefore feel it is only a matter of time before an outperforms during softening periods in the market. I think this accommodation is reached with China.
“Markets are currently very differentiated. Some names are struggling to get to market while others are still able to do so, albeit with more difficulty than last year.”
HONG NAM YEOH DBS
12|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 n GREEN We have definitely seen spreads trending wider this n YEOH I would add that politics are a destabilising factor. The year. But sensibly priced and sized deals, in the context of world is much more polarised than it used to be, which we see the market, continue to see good investor sponsorship. This particularly in the US and in the UK with Brexit. has been the case in the US in particular, but we have also It can be difficult to come to market when politics is playing seen good dynamics in the Australian and yen markets. It has out through social media, and this in turn is creating volatility. actually been the markets closest to home where execution Asian banks typically need three days of calm to execute a certainty has been less assured. transaction: one day to realise markets are stable, the second n ZILELI It is worth noting that spreads are elevated from where to communicate plans and the third to price the deal. This they were a year ago but not from where they were two years becomes very difficult when volatility can be caused by a tweet. ago. They have retraced a little of the widening from March This drove markets in the first half of 2018. although they are still wider, albeit not significantly, than they More recently, there seems to be a phenomenon occurring were a year ago. where investors are adjusting to this political environment and Overall, I would say current funding conditions are taking tweets in their stride a bit more. This is particularly the supportive of market access even though I agree that it is vital case in the bond market, which has been more stable than for issuers to navigate patches of volatility. We all expected equity. extended periods of calm interspersed with volatility and this is However, new-issue concessions have increased in size. In exactly how it has turned out to be. 2017, new-issue concessions were practically nonexistent as the We might look at more defensive products in the volatile market was rallying. The rally has finished now, and we have periods, and our choices will come down to relativities across started paying new-issue concessions in the 5-10 basis points markets. But I am confident that we could issue today if we had range. On the positive side, this is giving some insulation to any to do so. volatility that may be caused by a tweet from the US president.
KangaNews Eva Zileli mentions the KangaNews What impact are issuers expectation of extended calm periods seeing specifically from higher US rates and interspersed with bouts of extreme volatility. quantitative tapering (QT) in Europe? Are Do funders agree that this is exactly what has these macro dynamics affecting funding come to pass? relative value or liquidity? n GREEN This year has been more punctuated than previous n ZILELI We saw a spike in US rates in October 2018. We years. I don’t think we’ve seen any periods where markets have haven’t issued in the US since this time but the spreads we been completely closed but it has felt a little bit more stop-start are being shown by the investment banks haven’t materially than we experienced in the last two years. changed. I expect this dynamic will be more prevalent in Having said this, conditions in 2016-17 were against the equities than in bond-market liquidity. backdrop of central-bank liquidity provision in Europe, which European QT is more likely to have a widening effect on reduced overall funding needs across the market and skewed spreads than higher US rates. I get the sense from some of supply-and-demand dynamics slightly more to issuers. the euro trades executed by non-Australian-origin issuers that If I was to characterise whether it has been an issuers’ or the impact is starting to flow through. Australian issuers will an investors’ market this year, we’ve seen more fluctuation inevitably get caught up in a spread-widening path, particularly between the two with pricing power moving from one side to in covered bonds. the other. n YEOH I certainly agree that tightening in Europe is moving This speaks to Hong Nam Yeoh’s point about investors spreads wider in the covered-bond market. But we look at this being more selective in the credits they will and won’t buy, on a swapped to US dollar basis, given we do not have a large which is a sign of a functioning market. In previous years, we euro asset or loan book. In this context, spread movement in might have seen a wider range of names coming to market euro covered bonds has been offset somewhat by the euro-US because investor choice was lower than it has been this year. dollar basis swap. It has not affected us too much.
“It is still early days for TLAC in Canada. There have been a few deals done to date – in Canada and the US – and these have been well received. As we move forward, we think our product will be well received by the global investor base.”
BROOKE HALES TD BANK
13 ROUNDTABLE
or more an achievable goal THE AUSTRALIAN DOLLAR AND for an issuer like DBS? YEOH We do not have a fixed GLOBAL ISSUERS goal because it is subject to The shape and format of Australian dollar issuance by global banks is in our borrowing requirement. But for capacity we can a state of flux in late 2018. However, major international issuers say the successfully issue A$750 currency continues to form an important part of their funding mix and million in senior, tier-two and diversification plans. covered bonds. It is therefore a function of which formats n KANGANEWS How has Australian dollars and we do a term-funding activities. There we need. Our spreads tend to the place of the Australian significant amount of investor- is a small evolution in its be comparable to those of the dollar in the funding mix relations work to support size and scale, but it is not Australian major banks, but in evolved over recent years? our access to this market. transformative. For example, considerably smaller volume. we have noticed a marginal YEOH We have been quite When we originally entered increase in Asia-ex Japan DBS has issued all of covered consistent in telling investors the Australian dollar market it participation in our Australian bonds, senior bonds and that the Australian dollar is was with the intention of being dollar transactions – albeit tier-two in Australian dollars an increasingly important an ongoing issuer. This has thus far it is only making a and investor reception has part of our funding mix.The not changed: the Australian difference at the margin. been a pleasant surprise in Australian dollar behaves like dollar is an important funding each asset class. We were a pan-Asian currency. It has source for us as we seek to The domestic market is not very careful and respectful of different uses in different parts diversify our investor base. without its capacity challenges market conventions when we of the balance sheet, but the so we are mindful of our first came to the market and point is that it is present in GREEN We look at the domestic frequency of access. The it has worked out very well. a lot of bank balance sheets Australian market as a very investor base is not as granular across Singapore and Hong strategic part of our overall as we see in some offshore Kangaroo senior is well Kong, which is very helpful. funding mix. We’ve been very jurisdictions – for example in received everywhere and It is also a very accessible fortunate to be able to take a Europe, where we generally obviously it is very popular currency for Asian banks. decent amount of funding from have three times the number of with Australian investors. We it over the past few years and accounts in our orderbooks. have been able to place some OUCHIYAMA We have Australian dollars have made with investors in Singapore found good opportunities to a meaningful contribution to n KANGANEWS On the and Hong Kong, though. diversify our investor base in our overall funding plan. subject of capacity, DBS the Australian dollar market. only debuted as an issuer Covered bonds tend to go to We are proud to be the most n KANGANEWS What in the Australian domestic a couple of balance sheets active Japanese total loss- observations does National market in 2016 but has been in Australia and a few asset absorbing capacity (TLAC) Australia Bank have about able to issue regularly since managers. There is a larger issuer in Australian dollars. domestic-market change? and has now printed a total portion placed into Hong of more than A$3 billion Kong than there is for senior. HALES We have issued senior ZILELI It is robust and (US$2.2 billion). Is reliably This is because Australian debt and covered bonds in continues to support our printing A$1 billion a year banks prefer to hold senior
Higher US rates have generally been positive for n OUCHIYAMA So far we have not seen any material impact commercial banking. We are not very concerned because we from higher US rates and QT in Europe. are a spread-based issuer. The fact that rates have gone higher has caused volatility and created new-issue concessions, but FUNDING COMPOSITION spreads remain quite tight. I suspect this is because a lot of asset managers, such as KangaNews Has the funding mix changed for insurance companies, have absolute targets. As yields have global financial institutions when it comes to gone up they have been able to meet these targets and they are currency of issuance, especially in light of the therefore able to be more aggressive with bids. In effect, yields fluid market conditions they have experienced going up is making new-issue concessions wider and capping in recent months? spreads at the same time. n OUCHIYAMA Our funding mix has not changed materially. We n GREEN There is a lot going on but the things that are really have issued US dollars and euros in recent months. driving our funding programme are regulatory driven, such as n HALES We haven’t seen any notable change in our currency the minimum requirement for own funds and eligible liabilities mix this year either. The five currencies we have issued are (MREL) build, which we are well progressed with. Ringfencing Canadian, US and Australian dollars, euros, and sterling. The in the UK has been a factor in our funding mix. first two are our primary funding currencies, but the Australian
14|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 over covered bonds because whether they’re plain vanilla investors submit to the for Australia’s committed- senior yields more. or structured in nature. jurisdiction of Canada and the liquidity facility (CLF), and Canadian Deposit Insurance in this context being able to n KANGANEWS How When it comes to private Corporation with respect issue senior debt from an important is it to have placements, documentation to bail-in. This means bail- Australian branch is important. significant domestic is down to investor choice. If in-eligible debt governed by investor involvement in your an investor came to us with foreign law is still permitted EMTN senior issuance should Australian dollar issuance? a private placement and under the Canadian regime. be targeted at investor bases they wanted it in Kangaroo in Hong Kong and Singapore, OUCHIYAMA Involvement of format, we could do this As a result, we don’t expect where CLF eligibility is not Australian domestic investors as we have a fairly flexible the implementation of the as important. The investor is one of the key factors for us funding programme. bail-in regime in Canada to base for Australian dollars is when we consider Australian smaller in these jurisdictions, dollar transactions. Without “WHEN WE ORIGINALLY ENTERED so it really depends on what any participation from the THE AUSTRALIAN DOLLAR MARKET the issuer is looking for. Australian domestic investor base, it would be difficult for us IT WAS WITH THE INTENTION OF Ultimately, the extra work for to issue Australian dollar bonds. BEING AN ONGOING ISSUER. THIS domestic documentation in HAS NOT CHANGED: THE AUSTRALIAN Australia is not too excessive, GREEN We don’t have any DOLLAR IS AN IMPORTANT FUNDING so if you want access to preset views about onshore SOURCE FOR US AS WE SEEK TO the broadest investor and offshore allocations. What base in Australian dollars we look for is as broad and DIVERSIFY OUR INVESTOR BASE.” you might as well do it. diverse a range of investors as BROOKE HALES TD BANK possible in any of our deals. HALES This goes back n KANGANEWS TD Bank affect our ability to issue off to the theme of investor n KANGANEWS Lloyds Bank (TD) issues in Australian a Kangaroo programme in diversification. When we issue has issued in Australia from dollars off a Kangaroo Australia. This may not be the off the Kangaroo programme both a Kangaroo programme programme and in fact it has case for other issuers globally. we get domestic investor and, for private placements, continued to issue in this participation, which helps off its EMTN programme. format even while US banks n KANGANEWS DBS has an us achieve that goal. What is the strategy here? have not able to do so in Australian branch through the last few years. What are which it does domestic Offshore investor participation GREEN We have invested in the the significant differences deals. What is the value of will, of course, also help with domestic programme on the between US and Canadian this compared with EMTN investor diversification so basis that we want to be able to banks in this regard? or Kangaroo issuance? there is no minimum amount attract the domestic investor of domestic investors we base. We use the Kangaroo HALES It’s a good question. YEOH If you are looking for need to have in our Kangaroo programme for very strategic, As you say, TD has a Kangaroo optimal pricing and volume deals. The way we think about benchmark transactions, but programme for senior debt. you want to make sure the it is that our aim is to have we have other programmes Canadian regulations allow instrument ticks as many a diverse investor base and that are set up more for bail-in debt to be governed boxes as possible for investors. we have various platforms privately placed transactions by foreign law as long as Some investors need eligibility that help us achieve this. dollar forms an important part of our funding strategy as it to solidify our access to the euro market. This has been an enables us to broaden and diversify our investor base. ongoing theme for a while. n ZILELI It is a bit different for National Australia Bank (NAB) n GREEN A more normalised funding requirement provides in the sense that we have issued slightly more in Australian banks with the ability to diversify by market and currency. For dollars this financial year than last, playing into the dynamic instance, we have conducted two Canadian dollar trades so far of the depth of liquidity in the local market. We issued US$3- in 2018 – the first we have done since 2011 or 2012. 3.5 billion last financial year, but our issuance into the US has It was good to be able to return to this market because moderated this year and we have issued more Australian dollars we have had long-standing dialogue and decent relationships than any other individual currency. with Canadian investors, but we have had limited need to go Market volatility has probably influenced the currency mix to their market in recent years. Similarly, we conducted our more than it has changed the product mix. For example, we first Swiss trade since 2013/14. To be able to provide further issued covered bonds in Australian dollars in 2018 rather than diversification without paying up for it was very positive. US dollars or euros. n YEOH We have decided to diversify our sources of funding a KangaNews How has the funding mix bit more due to the volatility we have seen. We have always had changed when it comes to use of products, reasonable access to the US dollar market and we are looking particularly in light of the more volatile 2018?
15 ROUNDTABLE
GROWTH IN SUSTAINABLE FINANCE Most of the world’s major bank issuers have initiated labelled environmental, social and governance (ESG) funding. Green bonds are clearly the leading ESG asset class to date, but as well as growing green programmes some international banks are looking closely at knitting wider sustainability goals into their debt issuance.
n KANGANEWS Where does green bonds ever issued by ZILELI During 2018, we have markets, like the US. Our aim ESG-themed issuance fit a bank. We are continuing executed the majority of is to grow the global market into overall funding plans to monitor developments our ESG-themed issuance and the only limiting factor is and in which markets is and opportunities in offshore, apart from the reference assets available. issuance targeted? other currencies. green tranche in our domestic residential mortgage-backed GREEN When we established HALES We have seen global OUCHIYAMA Sumitomo- securities transaction. We our “Helping Britain Prosper” support for ESG bonds continue Mitsui Banking Group is one issued a green bond in Europe ESG plan a few years ago we to grow since TD issued its of the major players in the and we incorporated a green worked on the basis that we first green bond in 2014. project-finance area and for tranche into a multitranche wanted a framework that Green bonds represent a small this reason we see a strong US dollar deal in June. would allow us to issue related part of our overall wholesale inflow of renewable-energy product in any market. The funding but they an important assets each year. Green-bond Our strategy for market reality, however, is that we part of the bank’s strategy issuance is always on our selection in ESG format is to have seen a higher frequency and its commitment to the agenda and we would like to be use this capacity to issue in of trades in Europe. environment. It’s such a part a regular issuer of green bonds. markets not just where we see of TD’s fabric – environmental depth of demand but where we From an investor diversification causes have been part of the We certainly see more and can help to develop the market. perspective, The European brand for a very long time. more focus on the ESG product market is probably where around the globe. However, For example, the European we get the most bang for our After our first print, in Canadian we do not know the local market is more developed buck given the concentration dollars, we issued a US$1 and regional investor base than any other but our strategy of socially responsible, ESG, billion green bond in 2017. because we have not issued leads us to allocate collateral and sustainable investors. This was one of the largest an Australian green bond. to issuing green bonds in other But there’s nothing to stop
n ZILELI We haven’t had to change our use of secured versus everything from additional tier-one to covered bonds, asset- unsecured instruments significantly, and we have continued backed securities and RMBS. If anything it has been more to issue covered bonds as well as residential mortgage-backed varied by type of issuance. securities (RMBS). UK banks are seeing more activity in securitisation funding. Market conditions certainly haven’t caused us to curb our This is perhaps partially to do with the end of the term-funding use of certain products – they simply mean we must navigate scheme in February 2018, but this had been expected and markets more carefully and be more selective about our therefore would have been factored into funding plans for this execution windows. year. For example, if we think there is demand for a euro deal we n HALES There has been no specific change in our funding mix will carry out additional due diligence to make sure we pick the relative to 12 months ago. right window to transact. We followed this approach last time we issued in Europe, in August 2018. KangaNews SMBC recently executed the n GREEN It’s a similar story for us. This year we, and other first-ever covered bond by a Japanese bank. banks, have issued the entire product suite available to us – What will this instrument add to the funding
“Having issued a large TLAC bond in Australian dollars, I would say if there was an equivalent regime in Australia it would have been easier for local investors to understand the Japanese TLAC framework.”
ATSUSHI OUCHIYAMA SUMITOMO-MITSUI FINANCIAL GROUP
16|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 us applying a sustainability appropriate way for us to issuance programme to appears to be a preference framework in any market. be thinking about potential be a strong ESG bank. for climate or green bonds. future market access in YEOH When we issued our first ESG-themed product. Even so, we will likely be in The reason for this tends green bond, in 2017, we always the market again in 2019 or to be impact reporting. It wanted US dollars to match The framework we had was very 2020. We will go through a is much easier and more our balance-sheet demand. much around supporting SMEs process at some stage where standardised to report the The European market is quite in economically disadvantaged we ask investors whether impact of reducing carbon advanced for green demand, emissions than it is the impact but the US dollar market is “THE EUROPEAN MARKET IS MORE of a social bond comprised also very active in the space. DEVELOPED THAN ANY OTHER BUT OUR of loans to healthcare and European investors did STRATEGY LEADS US TO ALLOCATE education, for example. This is participate in the transaction: not to say we would not issue there was a lot of demand COLLATERAL TO ISSUING GREEN BONDS another social bond. In fact, from investors in the UK and IN OTHER MARKETS, LIKE THE US. OUR we have kept our green- and some from Germany as well. AIM IS TO GROW THE GLOBAL MARKET social-bond programmes AND THE ONLY LIMITING FACTOR IS separate, including having n KANGANEWS Will REFERENCE ASSETS AVAILABLE.” two distinct frameworks, to green issuance continue enable us to do just this. to dominate over other EVA ZILELI NATIONAL AUSTRALIA BANK kinds of ESG product? GREEN I think that’s right. parts of the UK. While there they would like us to focus When we roadshowed our GREEN We issued two ESG was an environmental element, on the green agenda or to trade, investors were certainly bonds that referenced the it was really thinking about spread out and look at issuing slightly less familiar with “Helping Britain Prosper” agriculture and environmental other themed bonds. the sustainable element. plan after we launched it. I projects within the subset think the social-impact side of social deprivation. ZILELI National Australia Bank HALES We have been focused of sustainable finance is most will continue to issue green on green bonds because the relevant to banks generically YEOH There is a good point and social bonds, but globally framework is well-established. and to Lloyds Bank in particular. here – that green issuance we expect green bonds to However, we continue to serves to draw attention exceed other types of ESG- monitor developments with The focus on economic to your efforts but you do themed issuance. From an regard to social and Sustainable prosperity seems the most not need a strong ESG investor’s perspective, there Development Goals bonds.
mix, and why is now the right moment to n GREEN I think there has been enough publicity around moves enter the market for the first time? to holdco issuance or senior-nonpreferred as an MREL, and n OUCHIYAMA A triple-A funding tool in the form of a covered enough data points for investors to be able to assess relative bond is definitely a huge benefit to the funding mix. The value in the securities banks are issuing. There is also plenty of success of our covered-bond programme will bring SMBC to a research out there. The transition has therefore been reasonably new level of stability in foreign-currency funding. An Australian smooth. dollar covered bond is definitely on our agenda for the future. Some jurisdictions have been slightly later adopters and there is perhaps slightly more confusion in those jurisdictions CAPITAL DEVELOPMENTS about what TLAC will mean for issuance programmes going forward. KangaNews How has the market globally n YEOH I agree that investors tend to be very clued-in with developed for new issuance formats driven issues such as TLAC. They draw comparisons across the by regulatory changes, especially the more stack, so for instance if we are discussing senior debt they recent TLAC developments? can compare to senior-preferred. Senior-nonpreferred is not
“I don’t think we’ve seen any periods where markets have been completely closed but it has felt a little bit more stop- start than we experienced in the last two years.”
PETER GREEN LLOYDS BANK
17 ROUNDTABLE
“Investors’ interests around TLAC tend to be twofold: supply and protections for the senior bonds they already own. They want to know what level of supply they can expect and whether we might apply a retrospective bail-in feature to our existing bonds.”
EVA ZILELI NATIONAL AUSTRALIA BANK
relevant for DBS, but I am sure investors would be able to international investors ask NAB about a TLAC make the same comparison if it were. regime in Australia? There has been a rating impact in jurisdictions where bail-in n ZILELI Investors have been asking about an Australian TLAC regimes have been implemented in such a way that all senior regime for several years now. So far, we have given them the debt is now senior-nonpreferred, such as Canada. When TLAC same answer throughout – which is “nothing yet”. is implemented in Singapore, I suspect we will price relative to Investors say their preference is for Australia not to come these on a ratings basis. up with an Australian-specific product that would warrant n HALES It is worth mentioning that it is still early days for education in an entirely new structure. As to whether there is a TLAC in Canada. There have been a few deals done to date – preferred route to follow, whether it’s senior nonpreferred or in Canada and the US – and these have been well received. As a holdco structure, there doesn’t seem to be a consensus but we move forward, we think our product will be well received by there also isn’t any real concern. the global investor base. Investors’ interests around TLAC tend to be twofold: n OUCHIYAMA We are fortunate in the sense that our TLAC supply and protections for the senior bonds they already own. rules are relatively simple and we have had no difficulty helping They want to know what level of supply they can expect and investors understand the Japanese TLAC framework. whether we might apply a retrospective bail-in feature to our existing bonds. KangaNews Brooke Hales, you mention n YEOH The Singaporean regulator has not issued its TLAC that it is early days for the TLAC regime guidelines yet, either. We were expecting it earlier in the year, in Canada. What will the bail-in regime but it has not yet been released. introduced in September 2018 mean for However, we know it is coming and we know some of the Canadian banks? elements. For instance, senior debt will not be subject to bail-in n HALES My view is that the Canadian regime is quite clear unless there is a specific clause declaring that it qualifies for and uncomplicated as we have only one class of senior debt. I bail-in. believe this will help drive long-term investor demand for the This leaves us the ability to meet requirements in different format. ways – we could easily issue senior-nonpreferred, for example. There are a couple of unique features of the Canadian It also means everything that has been issued to date as senior regime that I would like to highlight. First, the bail-in regime will remain that way. builds on our regulator’s existing toolkit but does not eliminate any of its existing powers. KangaNews Does the fact that Australia does In addition, because we have only one class of senior- not yet have its own TLAC regime cause unsecured debt Canadian domestic systemically important any issues, for instance around investor banks cannot elect to issue non-bail-in senior-unsecured debt. engagement, for banks trying to issue Our regulator has discretion to determine the proportion compliant paper in Australian dollars? of bail-in debt that is converted as well as the conversion n OUCHIYAMA Having issued a large TLAC bond in Australian multiplier, and such determinations must respect the creditor dollars, I would say if there was an equivalent regime in hierarchy. Australia it would have been easier for local investors to Finally, I would note that in Canada a bail-in would be understand the Japanese TLAC framework. We are aware that effected through equity conversion only. There is no write- some domestic investors are cautious on TLAC-eligible paper. down option. n HALES I take the point, but we don’t think it will cause any issues for us in Australia. A Canadian bank hasn’t yet done an KangaNews Australia does not yet have Australian dollar TLAC deal, but TD and its peers have done an equivalent of a TLAC regime and only a lot of investor-relations work to explain the Canadian regime got its first regulatory proposal on the and how it compares with other global jurisdictions. We expect topic in November 2018 (see p3). What do Canadian TLAC will be well received in Australia. •
18|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 ISSUER PROFILES
ABN AMRO Funding strategy ABN AMRO’s funding strategy is aimed at maintaining market access by diversifying issuance sources in different markets. The funding need of €10-15 billion annually mainly consists of long-term euro (>10 years) and shorter-term US dollar (2-5 years) issues. Shorter-term US dollar needs are also raised via COMPANY DATA indirect issuance in major currencies. LISTING JURISDICTION/EXCHANGE Netherlands/Euronext FINANCIAL YEAR-END DATE 31 Dec AUD activity BLOOMBERG TICKER ABNANV Corp ABN AMRO’s AUD outstanding is around A$2 billion (1.4% of MARKET CAPITALISATION €22.5bn (30 Jun 18) total). Historically, the bank has been present in the AUD market on a regular basis. It has had a Kangaroo programme in place CREDIT METRICS since 2012. Going forward, ABN AMRO will continue to look at BANK SENIOR CREDIT RATINGS (S&P/M/F) A/A1/A+ (positive/stable/stable) opportunities in the AUD market to enhance its credit curve and AT1 DEBT RATING (S&P) BB+ T2 DEBT RATINGS (S&P/M/F) BBB-/Baa2/A- maintain a diversified funding base. NET STABLE-FUNDING RATIO >100% (30 Jun 18) LIQUIDITY-COVERAGE RATIO >100% (30 Jun 18) TERM DEBT MATURITY PROFILE (ALL CURRENCIES) CET1/TOTAL CAPITAL RATIO 18.3%/22.1% (30 Jun 18) Senior secured Senior unsecured AT1 T2 TOTAL SIZE OF ASSET BOOK/ €395.4bn/€104.5bn (30 Jun 18) RISK-WEIGHTED ASSETS 16 0.3 14 1.6 0.3 FUNDING METRICS (30 JUN 18) 1.0 12 1.5 FUNDING BREAKDOWN 10 5.8 SHORT-TERM WHOLESALE 27% 4.2 BN EQUIV.) 8 LONG-TERM WHOLESALE 73% € 1.5 13.9 WEIGHTED-AVERAGE TERM-DEBT MATURITY 6.7 yrs 9.4 6 2.4 WHOLESALE FUNDING BREAKDOWN 4.2 4 6.8 6.4 6.6 2.4 1.3 0.9 COVERED BONDS – INCLUDING €8BN TLTRO 44% VOLUME ( 0.3 1.0 2 2.4 0.4 SENIOR 40% 2.7 1.8 1.9 1.8 1.6 0,4 0.1 0.6 0.7 0.6 T2 11% 0 AT1 3% 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 >2028 SECURITISED 2% AT1 and T2 data is listed to call date. TOTAL OUTSTANDING TERM-DEBT ISSUANCE BY CURRENCY OUTSTANDING AUD BONDS EUR 68.5% COUPON FIRST ISSUE VOLUME MATURITY/ COUPON ASSET DOC./ (%)/ USD DATE (A$M) CALL DATE TYPE TYPE PROGRAMME 21.5% MARGIN GBP 4.1% 8 Oct 15 25 16 Oct 20 117/BBSW FRN Senior Reg S CHF 1.6% 27 Aug 15 114 8 Sep 25 4.37 Fixed Senior Reg S AUD 1.4% 1 Apr 15 225 9 Apr 20 3.25 Fixed Senior Kangaroo JPY 1.2% 2 Apr 14 100 16 Apr 19 4.625 Fixed Senior Reg S OTHER 1.7% 25 Feb 14 250 17 Mar 21 5.25 Fixed Senior Reg S 29 Jan 14 400 5 Feb 19 4.75 Fixed Senior Kangaroo 29 Jan 14 100 5 Feb 19 135/BBSW FRN Senior Kangaroo About ABN AMRO 13 Jan 14 15 22 Jan 19 129/BBSW FRN Senior Reg S BN AMRO is a modern full-service bank with a 26 Nov 13 100 10 Dec 20 5.625 Fixed Senior Reg S 20 Nov 13 20 27 Nov 18 125/BBSW FRN Senior Reg S transparent and client-driven business model, a 16 Sep 13 30 24 Sep 18 3.51 Fixed Senior Reg S moderate risk profile, a clean and strong balance 9 Jul 13 385 23 Jul 19 5.25 Fixed Senior Reg S sheet with traditional and digital banking products, 7 Mar 13 225 21 Mar 19 5.00 Fixed Senior Reg S and a solid capital position and strong funding 14 Jun 12 50 21 Jun 22 6.84 Fixed Senior Reg S profile. The bank serves retail, private and corporate banking AUD bonds outstanding at 31 August 2018. A SOURCE: ABN AMRO OCTOBER 2018 clients, with a primary focus on the Netherlands and selective operations internationally. FOR FURTHER INFORMATION PLEASE CONTACT: Countries where ABN AMRO is present include France, Germany, Belgium, Luxembourg and the UK. Furthermore, Daniëlle Boerendans Head of Long-Term Funding and Capital Issuance ABN AMRO has branches or representative offices in Oslo, [email protected] Athens, Guernsey, Sydney, Sao Paolo, Shanghai, Hong Kong, +31 20 3836 014 Tokyo, Moscow, Singapore, Dallas, New York and Chicago. www.abnamro.com/nl/investor-relations/index.html
19 ISSUER PROFILES
ANZ
COMPANY DATA wholesale funding plan across major global markets and will LISTING JURISDICTION/EXCHANGE Australia/ASX continue to diversify its wholesale funding across currencies FINANCIAL YEAR-END DATE 30 Sep and platforms. BLOOMBERG TICKER ANZ MARKET CAPITALISATION A$81bn (30 Sep 18) AUD activity The Australian dollar continues to be a key strategic funding CREDIT METRICS currency. The AUD market offers investor diversification and AA-/Aa3/AA- (negative, stable, stable) BANK SENIOR CREDIT RATINGS (S&P/M/F) (opco structure is used) funding at levels competitive with the bank’s global credit curve. AT1 DEBT RATINGS (S&P/M/F) Not available for retail ANZ will continue its activity in this market as part of its global T2 DEBT RATINGS (S&P/M/F) BBB/Baa1/A+ funding platform. NET STABLE-FUNDING RATIO 114.6% (30 Sep 18) LIQUIDITY-COVERAGE RATIO 138% (30 Sep 18) CET1/TOTAL CAPITAL RATIO 11.44%/15.2% (30 Sep 18) TERM DEBT MATURITY PROFILE (ALL CURRENCIES) TOTAL SIZE OF ASSET BOOK/ RISK-WEIGHTED ASSETS A$944bn/A$391bn (30 Sep 18) Senior unsecured Covered bonds T2
RMBS AT1 FUNDING METRICS (30 SEP 18) WHOLESALE FUNDING BREAKDOWN 30 SHORT-TERM WHOLESALE 31% 1.1 0.2 LONG-TERM WHOLESALE 69% 25 0.8 0.3 0.5 WEIGHTED AVERAGE TERM-DEBT MATURITY 1 Around 3 yrs 0.2 2.0 0.5 FUNDING BREAKDOWN 20 2.1 4.3 SENIOR UNSECURED 78%
COVERED BONDS 14% 1.6 15 25.3 T2 7% 0.1 1.0 0.7 0.1 2.3 RMBS 1% 2.7 0.1 18.6 2.2 WHOLESALE FUNDING CURRENCY 10 17.8 2.9 2 1.6 BREAKDOWN 1.5 VOLUME (A$BN EQUIV.) 0.3 USD, CAD 40% 5 10.0 9.2 0.9 AUD, NZD 33% 3.0 6.7 GBP, EUR, CHF 21% 1.9 0 JPY, HKD, SGD, CNY 6% FY19 FY20 FY21 FY22 FY23 FY24 FY25+ 1. Calculated on a residual-maturity basis with reference to the entire long- AT1 and T2 data is listed to call date. term debt portfolio. 2. Long-term wholesale currency split. SOURCE: ANZ NOVEMBER 2018
About ANZ ounded in 1835 and headquartered in Australia, ANZ employs 40,000 staff and provides banking and financial products and services to 8 million customers while operating across 34 markets. ANZ is New Zealand’s largest and Australia’s third-largest consumer Fbank. ANZ’s main business divisions consist of retail, business and private banking, wealth Australia, institutional, and Asia retail and Pacific. ANZ is listed on the Australian Stock Exchange with a market capitalisation of A$81 million at 30 September 2018.
Funding strategy The Group estimates it has a steady-state funding requirement of A$20-25 billion per year. ANZ has a well-diversified
20|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 OUTSTANDING AUD BONDS
FIRST ISSUE VOLUME MATURITY/ COUPON (%)/ COUPON ASSET DOC./PROGRAMME DATE (A$M) CALL DATE MARGIN TYPE TYPE
16 Jul 18 400 16 Jul 21 2.95 Fixed Senior DIP 16 Jul 18 1,600 16 Jul 21 75/BBSW FRN Senior DIP 9 May 18 550 9 May 23 3.35 Fixed Senior DIP 9 May 18 2,000 9 May 23 90/BBSW FRN Senior DIP 18 Jan 18 425 18 Jan 23 3.10 Fixed Senior DIP 18 Jan 18 1,250 18 Jan 21 58/BBSW FRN Senior DIP 18 Jan 18 1,325 18 Jan 23 77/BBSW FRN Senior DIP 6 Dec 17 650 6 Dec 18 25/BBSW FRN Senior DIP 28 Mar 17 225 28 Sep 27 4.10 Fixed Senior DIP 7 Mar 17 400 7 Mar 22 3.30 Fixed Senior DIP 7 Mar 17 1,600 7 Mar 22 100/BBSW FRN Senior DIP 16 Aug 16 250 16 Aug 21 2.80 Fixed Senior DIP 16 Aug 16 2,500 16 Aug 21 113/BBSW FRN Senior DIP Keep up 7 Apr 16 175 7 Apr 21 3.25 Fixed Senior DIP 7 Apr 16 2,650 7 Apr 21 118/BBSW FRN Senior DIP 25 Jan 16 1,400 25 Jan 19 88/BBSW FRN Senior DIP 17 Nov 15 700 17 May 26 270/BBSW FRN T2 DIP 3 Jun 15 600 3 Jun 20 3.25 Fixed Senior DIP to date with 17 Apr 15 3,000 17 Apr 20 82/BBSW FRN Senior DIP 11 Nov 14 250 11 Nov 19 3.75 Fixed Senior DIP 11 Nov 14 1,750 11 Nov 19 85/BBSW FRN Senior DIP 25 Jul 14 400 25 Jul 19 3.75 Fixed Senior DIP 25 Jul 14 1,875 25 Jul 19 82/BBSW FRN Senior DIP KangaNews 25 Jun 14 750 25 Jun 24 193/BBSW FRN T2 DIP 16 Aug 13 700 16 Aug 23 5.00 Fixed Covered Covered bond
T2 data is listed to call date. SOURCE: ANZ NOVEMBER 2018 on LinkedIn
www.linkedin.com/company/kanganews
FOR FURTHER INFORMATION PLEASE CONTACT: Mostyn Kau Head of Global Funding +61 8655 3860/+61 478 406 607 [email protected] Scott Gifford Head of Debt Investor Relations +61 3 8655 5683/+61 434 076 876 [email protected] http://debtinvestors.anz.com
21 ISSUER PROFILES
BANK OF AMERICA MERRILL LYNCH
COMPANY DATA with more than 36 million active users, including nearly 26 LISTING JURISDICTION/EXCHANGE US/NYSE million mobile users. FINANCIAL YEAR-END DATE 31 Dec Bank of America is a global leader in wealth management, BLOOMBERG TICKER BAC US equity corporate and investment banking and trading across a broad MARKET CAPITALISATION US$281.3bn (30 Sep 18) range of asset classes, serving corporations, governments, institutions and individuals around the world. The bank CREDIT METRICS offers industry-leading support to approximately three million BANK SENIOR CREDIT RATINGS (S&P/M/F) small-business owners through a suite of innovative, easy- BAC A-/A3/A+ (all stable) BANA A+/Aa3/AA- (all stable) to-use online products and services. It serves clients through AT1 DEBT RATINGS (S&P/M/F) (BAC) BBB-/Ba1/BBB- operations across the US, its territories and more than 35 other T2 DEBT RATINGS (S&P/M/F) (BAC) BBB+/Baa2/A countries. N/A, since final requirement remains NET STABLE-FUNDING RATIO pending LIQUIDITY-COVERAGE RATIO 120% (30 Sep 18) Funding strategy 11.4%/15.2% (standardised approach) CET1/TOTAL CAPITAL RATIO Bank of America funds its assets primarily with a mix of (30 Sep 18) deposits and secured and unsecured liabilities through a TOTAL SIZE OF ASSET BOOK/ US$2,338.8bn/US$1,439.7bn (30 Sep 18) RISK-WEIGHTED ASSETS centralised, globally coordinated funding approach diversified across products, programmes, markets, currencies and investor FUNDING METRICS (30 SEP 18) groups. FUNDING BREAKDOWN The primary benefits of this centralised funding SHORT-TERM 53% approach include greater control, reduced funding costs, LONG-TERM 47% wider name recognition by investors and greater flexibility WHOLESALE FUNDING BREAKDOWN to meet the variable funding requirements of subsidiaries. SENIOR 70% SUBORDINATED 11% Where regulations, time-zone differences or other business FHLB ADVANCE 7% considerations make parent-company funding impractical, SECURITISATION 4% certain other subsidiaries may issue their own debt. JUNIOR SUBORDINATED 0.4% The bank funds a substantial portion of its lending activities OTHER 8% through deposits, which were US$1.31 trillion at 30 June 2018 TOTAL OUTSTANDING TERM-DEBT ISSUANCE
BY CURRENCY and at 31 December 2017. Bank of America is also always USD 77% prepared to take advantage of funding opportunities that align EUR 16% with its overall funding strategies, as well as related regulatory GBP 3% requirements. JPY 1% AUD 1% CAD 1% AUD activity OTHER 1% Bank of America funds its lending activities mainly through its local corporate deposits and debt issuance, which were A$3.1 billion and A$1.2 billion respectively at 30 June 2018. Australian About Bank of America Merrill Lynch funding activity is managed by a team in Sydney, which ensures ank of America is one of the world’s leading financial that the AUD balance-sheet funding strategy is aligned with the institutions, serving individual consumers, small and corporate principles of diversity and stability while still taking middle-market businesses and large corporations with advantage of local opportunities. a full range of banking, investing, asset-management and other financial and risk-management products Band services. The company provides unmatched convenience in the US, serving approximately 67 million consumer and small-business clients with approximately 4,400 retail financial centres, approximately 16,100 ATMs and award-winning digital banking
22|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 COUPON FIRST ISSUE VOLUME MATURITY/ ASSET DOC./ TERM DEBT MATURITY PROFILE (ALL CURRENCIES) (%)/ COUPON TYPE DATE (A$M) CALL DATE TYPE PROGRAMME MARGIN 1 Dec 11 1 2 Dec 21 0.50 Fixed Senior Structured note Senior FHLB advances Securitisations 1 Dec 11 4 2 Dec 31 0.50 Fixed Senior Structured note Subordinated Junior subordinated Other 1 Dec 11 16 2 Dec 18 N /A Structured Senior Structured note Zero 140 28 Nov 11 30 29 Nov 31 0 coupon Senior Structured note 1 Nov 11 6 2 Nov 21 0.50 Fixed Senior Structured note 120 2.2 27 Sep 11 13 28 Sep 21 0.50 Fixed Senior Structured note 2.2 22 Mar 11 1 23 Mar 21 0.50 Fixed Senior Structured note 100 2.2 10 Dec 10 45 10 Dec 29 N /A Structured Senior Structured note Step-up 80 18 Nov 10 15 19 Sep 19 7.75 fixed Senior Structured note 19 Aug 10 2 20 Aug 20 0.50 Fixed Senior Structured note 60 2 Jun 08 2 3 Mar 28 7. 35 Structured Senior Structured note 91.6 22 Nov 07 3 31 Dec 49 N /A N /A Other Other 40 3.2 1.5 3.4 22 Nov 07 5 31 Dec 49 N /A N /A Other Other VOLUME (US$BN EQUIV.) 11.8 2.8 0.9 22 Nov 07 11 31 Dec 49 N /A N /A Other Other 20 3.0 1.5 3.0 3.1 2.0 0.6 0.5 22 Nov 07 6 31 Dec 49 N /A N /A Other Other 16.3 11.3 16.4 16.9 0 5.7 21 Jun 07 1 15 Jun 37 0.10 Structured Senior Structured note 2018 2019 2020 2021 2022 >2022 23 May 06 1 31 Dec 49 N /A N /A Other Other 23 May 06 1 31 Dec 49 N /A N /A Other Other 28 Dec 01 5 30 Jun 23 N /A N /A Other Other OUTSTANDING AUD BONDS Data at 30 June 2018. Structured notes listed with call date as maturity COUPON FIRST ISSUE VOLUME MATURITY/ COUPON ASSET (%)/ DOC./PROGRAMME date. Significant majority of “other” is structured liabilities not issued by DATE (A$M) CALL DATE TYPE TYPE MARGIN the holding company. Zero 7 Jun 18 50 7 Jun 21 0 coupon Senior Structured note SOURCE: BANK OF AMERICA MERRILL LYNCH OCTOBER 2018 Zero 30 May 18 40 30 May 19 0 coupon Senior Structured note 21 May 18 12 19 Jan 23 N /A Structured Senior Structured note Zero 8 Feb 18 50 8 Feb 19 0 coupon Senior Structured note Zero 8 Nov 17 15 8 Nov 27 0 coupon Senior Structured note 23 Dec 16 3 24 Dec 18 N /A Structured Senior Structured note 155/ 5 Aug 16 550 5 Aug 21 BBSW FRN Senior Benchmark 5 Aug 16 200 5 Aug 21 3.30 Fixed Senior Benchmark 165/ 9 Dec 15 75 2 Apr 19 BBSW FRN Other Other 470/ 4 Dec 15 42 2 Apr 19 BBSW FRN Other Other 110/ 5 Nov 15 850 5 Nov 18 BBSW FRN Senior Benchmark 5 Sep 14 425 5 Mar 20 4.25 Fixed Senior Benchmark 115/ 5 Sep 14 675 5 Mar 20 BBSW FRN Senior Benchmark 142/ 23 May 13 425 23 Aug 18 BBSW FRN Senior Benchmark 23 May 13 425 23 Aug 18 4.50 Fixed Senior Benchmark 23 Apr 12 2 24 Apr 19 0.50 Structured Senior Structured note Step-up 27 Mar 12 3 28 Mar 22 7.00 fixed Senior Structured note 21 Feb 12 9 22 Feb 22 0.50 Fixed Senior Structured note FOR FURTHER INFORMATION PLEASE CONTACT: 21 Dec 11 2 22 Dec 31 2.00 Fixed Senior Structured note George Anderson 15 Dec 11 6 16 Dec 31 0.50 Fixed Senior Structured note Country Treasurer, Australia 15 Dec 11 2 16 Dec 31 3.00 Fixed Senior Structured note [email protected] 8 Dec 11 3 9 Dec 31 2.00 Fixed Senior Structured note +61 2 9226 5679 8 Dec 11 3 9 Dec 31 0.50 Fixed Senior Structured note www.investor.bankofamerica.com
23 ISSUER PROFILES
of nonpreferred senior debt, €13 billion of structured products BNP PARIBAS and other, and €3 billion of covered funding, equally split between covered bonds and securitisation.
AUD activity BNP Paribas has been an active issuer in the AUD market for more than 25 years. The bank uses the AUD market for COMPANY DATA its wholesale funding from senior-unsecured (preferred and LISTING JURISDICTION/EXCHANGE France/Euronext Paris nonpreferred) to T2, for diversification purposes. The bank has FINANCIAL YEAR-END DATE 31 Dec a domestic debt issuance programme (last issuance in 2015) and BLOOMBERG TICKER BNP also issues AUD debt from its EMTN programme. BNP Paribas MARKET CAPITALISATION €77.7bn (31 Dec 17) has issued in excess of A$1.5 billion over the past two years.
CREDIT METRICS BANK SENIOR CREDIT RATINGS (S&P/M/F) TERM DEBT MATURITY PROFILE (AUD) PREFERRED A/Aa3/A+ (positive, stable, stable) NONPREFERRED A-/Baa1/A+ T2 Senior unsecured Senior nonpreferred AT1 DEBT RATINGS (S&P/M/F) BBB-/Ba1/BBB- 1,000 T2 DEBT RATINGS (S&P/M/F) BBB+/Baa2/A 900 NET STABLE-FUNDING RATIO Not applicable yet 800 LIQUIDITY-COVERAGE RATIO 121% (31 Dec 17) 700 325 CET1/TOTAL CAPITAL RATIO 11.8%/14.6% (31 Dec 17) 600
TOTAL SIZE OF ASSET BOOK/ €1,750,351m (prudential scope)/ A$M) RISK-WEIGHTED ASSETS €640,644m (31 Dec 17) 500
400 750 FUNDING METRICS (31 DEC 17) VOLUME ( 300 545 WHOLESALE FUNDING BREAKDOWN 200 SHORT-TERM WHOLESALE 56% 225 280 275 100 200 165 LONG-TERM WHOLESALE 44% 125 115 WHOLESALE TERM FUNDING BREAKDOWN 0 SECURED SENIOR DEBT 20% 2019 2020 2021 2022 2023 2025 2026 2027 2028 2029 2030 2031 SENIOR-PREFERRED DEBT 57% SENIOR-NONPREFERRED DEBT 7% OUTSTANDING AUD BONDS COUPON SUBORDINATED 9% FIRST ISSUE VOLUME MATURITY/ COUPON DOC./ (%)/ ASSET TYPE DATE (A$M) CALL DATE TYPE PROGRAM. T1 HYBRID 6% MARGIN TOTAL OUTSTANDING TERM-DEBT ISSUANCE 12 Oct 18 275 12 Oct 28 4.875 Fixed T2 EMTN BY CURRENCY1 Senior non- EUR 60% 16 Mar 17 175 16 Dec 22 4.25 Fixed preferred EMTN USD 26% Senior non- 16 Mar 17 150 16 Dec 22 175/BBSW FRN preferred EMTN OTHER 14% 9 Sep 16 280 9 Mar 27 4.625 Fixed T2 EMTN 1. Excludes short-term wholesale funding. 25 Aug 16 115 25 Aug 31 4.80 Fixed T2 EMTN About BNP Paribas 31 May 16 545 31 May 23 5.00 Fixed T2 EMTN 26 May 16 125 26 May 26 5.20 Fixed T2 EMTN NP Paribas, Europe’s leading provider of banking and 19 Nov 15 165 19 Nov 25 4.25 Fixed Senior EMTN financial services, has four domestic retail banking 21 May 15 425 21 May 20 110/BBSW FRN Senior Domestic markets in Europe – in France, Belgium, Italy and 21 May 15 225 21 May 20 3.75 Fixed Senior Domestic Luxembourg. The bank operates in 73 countries and 18 Nov 14 100 18 Nov 21 4.375 Fixed Senior EMTN has more than 198,000 employees. BNP Paribas has 5 Mar 14 125 5 Mar 21 5.125 Fixed Senior EMTN two main businesses: retail banking services and corporate and 21 Jan 14 100 21 Jan 20 5.00 Fixed Senior EMTN B 19 Sep 13 200 19 Sep 19 5.25 Fixed Senior EMTN institutional banking. As at 31 August 2018. T2 data is listed to call date. Includes only deals of A$100m or more. All senior deals are unsecured. Funding strategy SOURCE: BNP PARIBAS OCTOBER 2018 Medium- to long-term wholesale funding is diversified by investor type, distribution network, financing programme and by FOR FURTHER INFORMATION PLEASE CONTACT: geographical area to ensure diversification. The 2018 medium-to-long term wholesale funding Claire Sineux Investor Relations Officer, BNP Paribas Group Finance programme totals €28 billion. Depending on market conditions, [email protected] this will include €2 billion of AT1 and T2 issues to be carried out +33 1 42 98 31 99 with a total target objective of 3% of RWA by 2020, €10 billion https://invest.bnpparibas.com/en
24|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 CANADIAN IMPERIAL BANK OF COMMERCE
COMPANY DATA funding strategy is to develop and maintain a sustainable issuance LISTING JURISDICTION/EXCHANGE Canada, US/TSX, NYSE base through which CIBC can access funding across many FINANCIAL YEAR-END DATE 31 Oct different depositors and investors, geographies, maturities, and BLOOMBERG TICKER CM CN, CM US funding instruments. MARKET CAPITALISATION C$52.7bn (31 Jul 18) AUD activity CREDIT METRICS CIBC was the first to introduce covered bonds in Australia post BANK SENIOR CREDIT RATINGS (S&P/M/F) LEGACY SENIOR DEBT A+/Aa2/AA- (all stable) the global financial crisis. CIBC intends to remain a periodic BAIL-IN SENIOR DEBT (ONLY OPCO) BBB+/A2/AA- (all stable) issuer in covered bonds and may look at issuance in benchmark AT1 DEBT RATINGS (SERIES 47 ISSUED 2018) size or private placements from its Australian branch. (S&P/M) BB+/Baa3 (hyb) T2 DEBT RATINGS (S&P/M/F) (NVCC) BBB/Baa1/A+ NET STABLE-FUNDING RATIO N/A: implementing by 2020 TERM DEBT MATURITY PROFILE (ALL CURRENCIES) LIQUIDITY-COVERAGE RATIO 126% (31 Jul 18) Secured Unsecured CET1/TOTAL CAPITAL RATIO 11.3%/14.8% (31 Jul 18) TOTAL SIZE OF ASSET BOOK/ 18 TOTAL CAPITAL RISK-WEIGHTED ASSETS C$595bn/C$212bn (31 Jul 18) 16
FUNDING METRICS (31 JUL 18) 14 6.2 WHOLESALE FUNDING BREAKDOWN 12 SHORT-TERM WHOLESALE 67% 10 6.4 LONG-TERM WHOLESALE 33% 8 WEIGHTED-AVERAGE TERM-DEBT MATURITY 3 yrs 6 WHOLESALE FUNDING BREAKDOWN 9.5 3.4 3.2 MBS 22% 4 VOLUME (C$BN EQUIV.) 5.7 COVERED BONDS 24% 2 3.6 1.8 2.9 1.0 1.0 1.5 SENIOR DEBT 41% 0.5 1.8 0 0.5 1.2 0.4 0.5 ABS 5% 1 Aug- Aug Aug Aug Aug Aug Aug Aug Aug Aug AT1 2% 31 Dec 2021 2022 2023 2024 2025 2026 2027 2028 2029+ 2020 PREFERRED SHARES 2% SUBORDINATED DEBT 4% TOTAL OUTSTANDING TERM-DEBT ISSUANCE OUTSTANDING AUD BONDS BY CURRENCY1 FIRST ISSUE VOLUME MATURITY/ COUPON (%)/ COUPON ASSET DOC./ CAD 65% DATE (A$M) CALL DATE MARGIN TYPE TYPE PROGRAMME USD 21% Legislative 7 Sep 17 700 7 Dec 20 55/BBSW FRN Covered covered OTHER 14% bond 1. Includes all outstanding debt, regardless of maturity. Legislative 19 Apr 16 400 19 Apr 21 110/BBSW FRN Covered covered bond About Canadian Imperial Bank of Commerce Legislative 12 Jun 15 300 12 Jun 20 65/BBSW FRN Covered covered anadian Imperial Bank of Commerce (CIBC) is a bond leading Canadian-based global financial institution. 11 Jul 13 100 25 Jul 19 4.75 Fixed Senior EMTN Through four strategic business units – Canadian AUD bonds outstanding at 30 September 2018.
personal and small business banking, Canadian SOURCE: CANADIAN IMPERIAL BANK OF COMMERCE SEPTEMBER 2018 commercial banking and wealth management, US Ccommercial banking and wealth management, and capital markets – CIBC provides a full range of financial products and services to 11 million individual, small-business, commercial, FOR FURTHER INFORMATION PLEASE CONTACT: corporate and institutional clients around the world. Wojtek Niebrzydowski VP, Global Term Funding Funding strategy [email protected] CIBC’s funding strategy includes access to funding through retail +1 416 956 6748 deposits and wholesale funding and deposits. The wholesale www.cibc.com/en/about-cibc/investor-relations.html
25 ISSUER PROFILES
COMMONWEALTH BANK OF AUSTRALIA
COMPANY DATA Funding strategy LISTING JURISDICTION/EXCHANGE Australia/ASX Commonwealth Bank’s long-term funding strategy is to provide FINANCIAL YEAR-END DATE 30 Jun the Group with access to term funding markets through the BLOOMBERG TICKER CBAAU cycle. This is achieved through the diversification of issuance MARKET CAPITALISATION A$128bn (30 Jun 18) across markets, products and investors. The Group’s strategy is to maintain an appropriate mix CREDIT METRICS of secured and unsecured issuance and to target a sustainable BANK SENIOR CREDIT RATINGS (S&P/M/F) AA-/Aa3/AA- (negative/stable/negative) maturity profile. In addition, the Group seeks to maintain an AT1 DEBT RATINGS (S&P) Not available for retail T2 DEBT RATINGS (S&P/M/F) BBB/Baa1/A+ appropriate mix of short- and long-term debt to achieve an NET STABLE-FUNDING RATIO 112% (30 Jun 18) appropriate balance of cost and duration. LIQUIDITY-COVERAGE RATIO 131% (30 Jun 18) CET1/TOTAL CAPITAL RATIO 10.1%/15% (30 Jun 18) AUD activity TOTAL SIZE OF ASSET BOOK/ A$975.165bn/A$458.612bn (30 Jun 18) RISK-WEIGHTED ASSETS The Australian dollar market is Commonwealth Bank’s home market and remains one of the core markets the Group will FUNDING METRICS (30 JUN 18) access. The bank issues senior-unsecured, secured and capital WHOLESALE FUNDING BREAKDOWN transactions in the Australian dollar market. SHORT-TERM WHOLESALE 33% Over the last three years, Commonwealth Bank has LONG-TERM WHOLESALE 67% consistently issued around a third of its term wholesale funding 1 WEIGHTED-AVERAGE TERM-DEBT MATURITY 5.1 yrs (includes amortising securitisation) in Australian dollars. WHOLESALE FUNDING BREAKDOWN SENIOR, T2, AT1 72% COVERED BONDS 19% TERM DEBT MATURITY PROFILE (ALL CURRENCIES) SECURITISATION 9% TOTAL OUTSTANDING TERM-DEBT ISSUANCE Covered bonds Unsecured Subordinated debt (AT1, T2) BY CURRENCY USD 33% 35 AUD 31% 30 EUR 22% 2.9 2.9 6.9 OTHER 14% 25
1. Only >1yr maturities; is on a residual-maturity basis. 20 0.8 21.4 14.3 15 3.0 About Commonwealth Bank of Australia 24.6 1.8 10 13.6 he Commonwealth Bank was founded under the 8.0
VOLUME (A$BN EQUIV.) 10.4 2.9 Commonwealth Bank Act in 1911 and empowered 5 9.3 2.9 5.8 0.7 1.7 3.7 1.8 4.2 3.3 to conduct savings and general banking business. The 0 0.4 1.7 2.0 1.3 1.7 0.1 bank has grown to a business with more than 50,000 Jun Jun Jun Jun Jun Jun Jun Jun Jun >Jun 2019 2020 2021 2022 2023 2024 2025 2026 2027 2027 people working in the Commonwealth Bank Group AT1 and T2 data is listed to call date. Twho serve nearly 16 million customers and more than 800,000 shareholders. OUTSTANDING AUD BONDS
FIRST ISSUE VOLUME MATURITY/ COUPON (%)/ ASSET DOC./ Commonwealth Bank offers a full range of financial COUPON TYPE services to help all Australians build and manage their finances. DATE (A$M) CALL DATE MARGIN TYPE PROGRAMME Services include retail, premium, business and institutional 17 Apr 18 40 17 Apr 28 3.79 Fixed Senior Domestic 17 Apr 18 60 17 Apr 25 3.52 Fixed Senior Domestic banking, funds management, superannuation, insurance, 6 Apr 18 1,365 15 Apr 25 340/BBSW FRN AT1 Prospectus investment and share-broking products and services. 8 Mar 18 50 8 Mar 38 4.33 Fixed Senior EMTN With a balance sheet approaching A$1 trillion, the bank 23 Feb 18 30 23 Feb 33 4.23 Fixed Senior EMTN operates primarily in Australia and New Zealand and more than 19 Feb 18 100 19 Feb 48 4.44 Fixed Senior EMTN 85% of its assets are in these countries. It also has operations 29 Jan 18 12 29 Jan 23 N /A Variable Senior EMTN in Europe, North America and Asia to support international 25 Jan 18 300 25 Apr 23 3.25 Fixed Senior Domestic 25 Jan 18 1,200 25 Apr 23 80/BBSW FRN Senior Domestic customers.
26|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 COUPON COUPON DOC./ FIRST ISSUE VOLUME MATURITY/ COUPON ASSET DOC./ FIRST ISSUE VOLUME MATURITY/ COUPON A S S E T (%)/ (%)/ PROGRAMME DATE (A$M) CALL DATE TYPE TYPE PROGRAMME DATE (A$M) CALL DATE TYPE TYPE MARGIN MARGIN 25 Jan 18 12 25 Jan 23 N /A Variable Senior EMTN 5 Nov 14 1,000 5 Nov 19 195/BBSW FRN T2 Domestic 19 Jan 18 30 19 Jan 33 4.05 Fixed Senior EMTN 1 Oct 14 3,000 15 Dec 22 280/BBSW FRN AT1 Prospectus 29 Nov 17 25 29 Nov 27 3.57 Fixed Senior Domestic Covered 9 Sep 14 50 26 Aug 24 4.28 Fixed Covered bond 29 Nov 17 75 29 Nov 24 3.25 Fixed Senior Domestic 18 Jul 14 500 18 Oct 19 3.75 Fixed Senior Domestic 21 Nov 17 14 21 Nov 47 4.44 Fixed Senior EMTN 18 Jul 14 1,750 18 Oct 19 85/BBSW FRN Senior Domestic 23 Oct 17 50 23 Oct 24 3.35 Fixed Senior Domestic 11 Jul 14 25 11 Jul 18 60/BBSW FRN Senior EMTN 11 Oct 17 40 11 Oct 47 4.49 Fixed Senior EMTN Covered 25 Sep 17 20 25 Sep 47 4.51 Fixed Senior EMTN 10 Jul 14 109 10 Jul 24 4.50 Fixed Covered bond 25 Jul 17 150 25 Jan 28 3.75 Fixed Senior Domestic 28 May 14 57 28 May 19 3.82 Fixed Senior EMTN 25 Jul 17 1,625 25 Jul 22 88/BBSW FRN Senior Domestic Covered 27 May 14 125 27 May 24 4.75 Fixed Covered bond 25 Jul 17 125 25 Jul 22 3.25 Fixed Senior Domestic 8 May 14 20 8 May 24 5.00 Fixed Senior Domestic 27 Apr 17 66 27 Apr 22 2.69 Fixed Senior EMTN 30 Apr 14 86 30 Apr 19 3.75 Fixed Senior EMTN 31 Mar 17 450 31 Mar 22 3.25 Fixed Senior Domestic 24 Apr 14 500 24 Apr 19 4.25 Fixed Senior Domestic 31 Mar 17 200 31 Mar 22 92/BBSW FRN Senior Domestic 24 Apr 14 1,500 24 Apr 19 88/BBSW FRN Senior Domestic 31 Mar 17 1,640 31 Mar 22 390/BBSW FRN AT1 Prospectus 10 Mar 14 100 10 Jun 20 4.75 Fixed Senior EMTN 10 Feb 17 20 10 Feb 29 0 Zero coupon Senior EMTN 3 Jan 14 10 3 Jan 19 4.56 Fixed Senior EMTN 18 Jan 17 26 18 Jan 29 0 Zero coupon Senior EMTN 21 Nov 13 11 13 Nov 20 0 Zero coupon Senior EMTN 18 Jan 17 20 18 Jan 29 0 Zero coupon Senior EMTN 5 Nov 13 7 5 Nov 18 4.55 Fixed Senior EMTN 17 Jan 17 2,250 17 Jan 22 111/BBSW FRN Senior Domestic 31 Oct 13 80 31 Oct 18 4.50 Fixed Senior Domestic 17 Jan 17 400 17 Jan 22 3.25 Fixed Senior Domestic 9 Oct 13 10 9 Oct 18 80/BBSW FRN Senior EMTN 9 Jan 17 10 9 Jan 29 0 Zero coupon Senior EMTN 24 Sep 13 150 24 Sep 19 5.00 Fixed Senior EMTN 28 Dec 16 12 28 Dec 28 0 Zero coupon Senior EMTN 31 Jul 13 88 31 Jul 23 5.50 Fixed Senior EMTN 23 Dec 16 15 23 Dec 28 0 Zero coupon Senior EMTN 28 Nov 12 1 28 Nov 24 4.18 Fixed Senior EMTN 21 Dec 16 10 21 Dec 28 0 Zero coupon Senior EMTN 17 Oct 12 2,000 15 Dec 18 380/BBSW FRN AT1 Prospectus 21 Dec 16 20 21 Dec 28 0 Zero coupon Senior EMTN 10 Aug 12 8 10 Aug 22 5.01 Fixed Senior EMTN 21 Dec 16 119 21 Dec 21 2.95 Fixed Senior EMTN 10 Aug 12 10 10 Nov 18 N /A Variable Senior EMTN 15 Dec 16 30 15 Dec 26 3.90 Fixed Senior EMTN 4 Jul 12 2 4 Jul 22 4.39 Fixed Senior EMTN 8 Dec 16 45 8 Dec 28 0 Zero coupon Senior EMTN 14 Jun 12 15 14 Jun 22 4.52 Fixed Senior EMTN 17 Nov 16 200 17 Nov 26 3.25 Fixed Covered Covered bond 19 Apr 12 3 19 Apr 22 1.50 Fixed Senior EMTN Covered 28 Mar 12 16 28 Mar 22 6.68 Fixed Senior EMTN 17 Nov 16 1,400 17 Nov 21 85/BBSW FRN Covered bond 21 Dec 10 12 21 Dec 20 7.09 Fixed Senior EMTN Covered 17 Nov 16 700 17 Nov 21 2.75 Fixed Covered bond 9 Nov 10 5 9 Nov 20 6.30 Fixed Senior EMTN 7 Nov 16 72 7 Nov 28 0 Zero coupon Senior EMTN 22 Oct 10 10 22 Oct 18 N /A Variable Senior EMTN 7 Nov 16 10 7 Nov 19 0 Zero coupon Senior EMTN 23 Sep 10 10 23 Sep 19 0 Zero coupon Senior EMTN 4 Nov 16 100 4 Nov 19 N /A Variable Senior EMTN 23 Sep 10 10 23 Sep 19 0 Zero coupon Senior EMTN 3 Nov 16 100 4 Nov 19 N /A Variable Senior EMTN 12 Aug 10 10 12 Aug 20 6.85 Fixed Senior EMTN 20 Oct 16 30 20 Oct 28 3.43 Fixed Senior EMTN 30 Jul 10 20 30 Jul 20 7.27 Fixed Senior EMTN 29 Sep 16 150 29 Sep 21 97/BBSW FRN Senior Domestic 16 Jun 10 25 16 Jun 20 6.91 Fixed Senior EMTN 20 Sep 16 3 20 Sep 28 2.85 Fixed Senior EMTN 15 Jun 10 15 15 Jun 20 6.93 Fixed Senior EMTN 12 Jul 16 475 12 Jul 21 2.90 Fixed Senior Domestic 22 Feb 10 11 22 Nov 18 N /A Variable Senior EMTN 12 Jul 16 2,100 12 Jul 21 121/BBSW FRN Senior Domestic 5 Feb 10 250 5 Feb 20 7.25 Fixed Senior Domestic 3 Jun 16 750 3 Jun 21 265/BBSW FRN T2 Domestic 24 Aug 09 6 24 Nov 18 N /A Variable Senior EMTN 10 May 16 5 10 May 21 2.70 Fixed Senior EMTN 20 Nov 07 150 20 Nov 20 3.60 Fixed Senior Domestic 27 Apr 16 80 27 Apr 21 2.93 Fixed Senior EMTN 20 Apr 07 10 20 Apr 27 0 Zero coupon Senior EMTN 22 Apr 16 49 17 Apr 19 2.27 Fixed Senior EMTN 6 Apr 99 25 6 Apr 29 6.50 Fixed T2 Domestic 21 Apr 16 52 21 Apr 20 2.71 Fixed Senior EMTN AUD bonds oustanding at 30 June 2018 – publicly available deals only. 18 Apr 16 2,000 18 Jul 19 98/BBSW FRN Senior Domestic AT1 and T2 deal maturities are the call dates. 30 Mar 16 1,450 15 Oct 21 520/BBSW FRN AT1 Prospectus SOURCE: COMMONWEALTH BANK OF AUSTRALIA OCTOBER 2018 18 Jan 16 2,300 18 Jan 21 115/BBSW FRN Senior Domestic 18 Jan 16 200 18 Jan 21 3.50 Fixed Senior Domestic 11 Dec 15 275 11 Jun 26 4.20 Fixed Senior Domestic 19 Oct 15 2,000 19 Oct 18 78/BBSW FRN Senior Domestic 17 Jul 15 1,500 17 Jul 20 90/BBSW FRN Senior Domestic 24 Apr 15 37 15 Apr 20 2.56 Fixed Senior EMTN 22 Apr 15 66 22 Oct 19 2.24 Fixed Senior EMTN FOR FURTHER INFORMATION PLEASE CONTACT: 2 Mar 15 40 27 Mar 23 0 Zero coupon Senior EMTN Fergus Blackstock Richard Nelson 20 Jan 15 14 20 Jan 25 0 Zero coupon Senior EMTN Head of Term Funding Head of Debt Investor Relations 14 Jan 15 50 14 Jan 25 3.82 Fixed Senior Domestic [email protected] [email protected] 23 Dec 14 50 23 Dec 18 55/BBSW FRN Senior EMTN +61 2 9118 1345 +61 2 9118 1343 17 Dec 14 33 17 Dec 24 0 Zero coupon Senior EMTN www.commbank.com.au/groupfunding
27 ISSUER PROFILES
COMMERZBANK corporate clients, multinationals, financial-service providers, and institutional clients.
Funding strategy Commerzbank anticipates a capital-market funding requirement of less than €10 billion over the coming years. Commerzbank COMPANY DATA offers a broad range of products in the capital markets. LISTING JURISDICTION/EXCHANGE Germany/FRA In addition to unsecured funding instruments such as FINANCIAL YEAR-END DATE 31 Dec senior-unsecured and T2, Commerzbank can also issue secured BLOOMBERG TICKER CBK.GR funding instruments, in particular mortgage Pfandbriefe and MARKET CAPITALISATION €11,86bn (27 Sep 18) public-sector Pfandbriefe. These give Commerzbank stable access to long-term funding with cost advantages compared CREDIT METRICS with unsecured funding. As such, Pfandbriefe are a key element BANK SENIOR CREDIT RATINGS (S&P/M/F) A-/A1/BBB+ (negative/stable/stable) of Commerzbank’s funding mix. Issuance formats range from T2 DEBT RATINGS (S&P/M/F) BBB-/Baa3/BBB large-volume benchmark bonds to private placements. NET STABLE-FUNDING RATIO Not disclosed LIQUIDITY-COVERAGE RATIO 140.99% (12m average as of 30 Jun 18) CET1/TOTAL CAPITAL RATIO 13.5%/16.5% (30 Jun 18) AUD activity TOTAL SIZE OF ASSET BOOK/ Commerzbank’s focus is on diversification in new foreign RISK-WEIGHTED ASSETS €487.5bn/€175.5bn (30 Jun 18) markets and new investors. In August 2018, the bank successfully issued its first Australian dollar T2 transaction. FUNDING METRICS (30 JUN 18) This marks the second offering into the Asian market after a WHOLESALE FUNDING BREAKDOWN (€63BN CAPITAL-MARKET FUNDING) successful Singapore dollar T2 issued in 2017. In September COVERED BONDS 51% 2018, Commerzbank issued a second successful Singapore UNSECURED 21% dollar T2 transaction into the Asian market. SUBORDINATED 14% PROMISSORY NOTES 14% TERM DEBT MATURITY PROFILE (ALL CURRENCIES) TOTAL OUTSTANDING TERM-DEBT ISSUANCE BY CURRENCY1 EUR 88% Covered bonds Unsecured Subordinated debt (AT1, T2) USD 5% 12 CHF 2% PLN 2% 10 1.5 1.4 GBP 1% 8 SGD 1% 3.6 3.7
JPY 0.5% BN EQUIV.) 0.2 1.2
€ 6 OTHER 0.5% 0.2 0.1 2.3 4 2.8 1.3 1.2 1. Includes all outstanding debt with >12-month residual term to maturity. 1.0 2.0 0.7 5.2 2.0 1.1 1.1 0.4 5.2 VOLUME ( 2 3.4 3.2 0.4 0.9 2.8 2.2 2.3 2.7 1.7 1.6 1.2 About Commerzbank 0 ommerzbank is a leading international commercial 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 >2028 bank with branches and offices in almost 50 Subordinated debt is listed to final maturity date. countries. In the private and small-business customer OUTSTANDING AUD BONDS segments, as well as for corporate clients, the bank COUPON FIRST ISSUE VOLUME MATURITY/ COUPON DOC./ (%)/ ASSET TYPE offers a comprehensive portfolio of financial services DATE (A$M) CALL DATE TYPE PROGRAMME MARGIN precisely aligned to clients’ needs. C 20 Aug 18 225 29 Aug 28 5.50% Fixed T2 EMTN Commerzbank finances approximately 30% of Germany’s Subordinated debt is listed to final maturity date. foreign trade and is market leader in financing German corporate clients. Due to its in-depth sector know-how in the German SOURCE: COMMERZBANK OCTOBER 2018 economy, the bank is a leading provider of capital-market products. Its subsidiaries Comdirect in Germany and mBank in FOR FURTHER INFORMATION PLEASE CONTACT: Poland are two of the world’s most innovative online banks. Franz-Josef Kaufmann With approximately 1,000 branches, Commerzbank has one Deputy Head of Capital Management and Funding [email protected] of the densest branch networks among German private banks. +49 69 136 81109 In total, Commerzbank serves more than 18 million private www.commerzbank.com/en/hauptnavigation/aktionaere/ and small-business customers, as well as more than 60,000 investor_relations.html
28|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 In Singapore, DBS is a universal bank serving all customer DBS segments, including the mass market. In other markets, DBS focuses on corporate banking, SME banking and wealth management.
Funding strategy DBS strives to develop a diversified funding base with access COMPANY DATA to funding sources across retail and wholesale channels, with LISTING JURISDICTION/EXCHANGE Singapore/SGX the strategy anchored on its core deposit franchise. DBS looks FINANCIAL YEAR-END DATE 31 Dec for cost efficiencies over the long term, focusing on SGD, BLOOMBERG TICKER DBSSP USD, EUR, AUD and HKD as key issuance currencies. Capital MARKET CAPITALISATION S$68.2bn (30 Jun 18) instruments are primarily issued from DBS Group Holdings Ltd (DBSH) while covered bonds originate from DBS Bank Ltd. CREDIT METRICS Senior notes are issued from both entities. BANK SENIOR CREDIT RATINGS (S&P/M/F) OPCO AA-/Aa1/AA- (all stable) HOLDCO –/Aa2/AA- (all stable) AUD activity AT1 DEBT RATINGS (M/F) Baa1(hyb)/BBB DBS views the AUD as an important part of its funding T2 DEBT RATINGS (M/F) A3 (hyb)/A+ strategy. DBS has issued across T2, covered bonds and senior in NET STABLE-FUNDING RATIO 110% (30 Jun 18) EMTN and Kangaroo formats. The bank plans to return to the LIQUIDITY-COVERAGE RATIO 135% (30 Jun 18) Australian market regularly. CET1/TOTAL CAPITAL RATIO 13.6%/16.2% (30 Jun 18) TOTAL SIZE OF ASSET BOOK/ RISK-WEIGHTED ASSETS S$540bn/S$291.8bn (30 Jun 18) TERM DEBT MATURITY PROFILE (ALL CURRENCIES)
1 FUNDING METRICS (30 JUN 18) AT1 Subordinated Covered Senior unsecured WHOLESALE FUNDING BREAKDOWN 6,000 SHORT TERM WHOLESALE 41% LONG-TERM WHOLESALE 59% 5,000 WEIGHTED-AVERAGE TERM-DEBT MATURITY 2.3 yrs 4,000 WHOLESALE FUNDING BREAKDOWN SENIOR UNSECURED 50% 3,000 3,782 308 COVERED BONDS 21% 1,698 SUBORDINATED 18% 2,000 1,739 193 AT1 11% 767 2,466 TOTAL OUTSTANDING TERM-DEBT ISSUANCE VOLUME (US$M EQUIV.) 1,000 543 716 1,393 BY CURRENCY 1,000 642 616 750 616 89 USD 37% 0 2018 2019 2020 2021 2022 2023 2024 2026 EUR 21% GMTN and covered bond programmes. AUD 15% AT1 and subordinated debt listed to call date. SGD 11% CNY 7% OUTSTANDING AUD BONDS HKD 4% FIRST ISSUE VOLUME MATURITY/ COUPON (%) COUPON DOC./ ASSET TYPE JPY 2% DATE (A$M) CALL DATE /MARGIN TYPE PROGRAMME OTHER 3% 16 Mar 18 750 3 Jun 19 77/BBSW FRN T2 GMTN Senior 1. Data includes GMTNs and covered bonds. 20 Mar 17 300 20 Mar 20 69/BBSW FRN unsecured GMTN Global About DBS 4 Sep 17 750 4 Sep 20 51/BBSW FRN Covered covered Global 4 Sep 17 150 4 Sep 20 2.5% Fixed Covered BS, a leading financial-services group headquartered covered Global 3 Jun 16 750 3 Jun 19 77/BBSW FRN Covered in Singapore, operates across 18 markets. It is an Asia- covered centric commercial bank focused on harnessing the GMTN and covered bond programmes. T2 bond is listed to call date. region’s long-term potential as the centre of economic SOURCE: DBS 30 JUNE 2018 gravity shifts eastwards to Asia. As an Asian specialist Dand a leader in digital transformation, DBS is set apart by its reach, sophistication and deep Asian insights. FOR FURTHER INFORMATION PLEASE CONTACT: DBS seeks to intermediate trade and investment flows between Asia’s three key axes of growth – southeast Asia, greater Yeoh Hong Nam Head, Wholesale and Structured Funding China and south Asia – as well as participate in Asia’s growing [email protected] affluence. The bank’s key franchises are in Singapore, Hong +65 6878 1618 Kong, China, Taiwan, India and Indonesia. www.dbs.com/investor/investor-contacts.html
29 ISSUER PROFILES
Funding strategy GROUPE BPCE The diversification of Groupe BPCE’s investor base is one of the top priorities of the wholesale funding policy. For long-term wholesale funding, the Group aims to issue 50% of its unsecured debt in euro and 50% in other currencies. The Group currently issues covered bonds only in euro.
COMPANY DATA AUD activity LISTING JURISDICTION/EXCHANGE Not listed Groupe BPCE’s AUD funding activity is part of its FINANCIAL YEAR-END DATE Dec 31 diversification policy and is designed to bring safe investment BLOOMBERG TICKER BPCEGP (bonds) opportunities to Australian and offshore investors throughout MARKET CAPITALISATION Not applicable Asia, especially Japan. The bank’s benchmark issues in AUD are documented under its Kangaroo programme. CREDIT METRICS In 2018, Groupe BPCE was the first issuer to combine BANK SENIOR CREDIT RATINGS (S&P/M/F) senior-preferred (five-year tenor) and senior-nonpreferred (10- SENIOR PREFERRED DEBT A+/A1/A+ (stable, stable, stable) SENIOR NONPREFERRED DEBT A-/Baa2/A+ year tenor) in a successful deal with total size of A$930 million. AT1 DEBT RATINGS (S&P/M/F) BBB-/Ba1(hyb)/BBB T2 DEBT RATINGS (S&P/M/F) BBB+/Baa2/A TERM DEBT MATURITY PROFILE (ALL CURRENCIES) NET STABLE-FUNDING RATIO Not disclosed Covered bonds (SCF, SFH, NPB & BP CB) CRH LIQUIDITY-COVERAGE RATIO >110% (30 Jun 18) Senior preferred BPCE Senior preferred Natixis CET1/TOTAL CAPITAL RATIO 15.2%/19.0% (30 Jun 18) (structured private placements) TOTAL SIZE OF ASSET BOOK/ Senior preferred CFF €1,287bn/€394.9bn (30 Jun 18) RISK-WEIGHTED ASSETS Senior nonpreferred BPCE Subordinated BPCE (AT1 & T2) Subordinated Natixis (AT1 & T2) FUNDING METRICS (31 DEC 17) 25 WHOLESALE FUNDING BREAKDOWN SHORT-TERM WHOLESALE 38% 20 LONG-TERM WHOLESALE 62% LONG-TERM WHOLESALE FUNDING 15 BN EQUIV.)
BREAKDOWN €
COVERED BONDS 54% 10 SENIOR PREFERRED 34%
SENIOR NONPREFERRED 3% VOLUME ( 5 SUBORDINATED 9% TOTAL UNSECURED TERM DEBT ISSUED IN FIRST NINE MONTHS OF 2018 BY CURRENCY 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029+ EUR 49% USD 34% AT1 and T2 data is listed to call date. JPY 9% AUD 5% OUTSTANDING AUD BONDS COUPON OTHER 3% FIRST ISSUE VOLUME MATURITY/ COUPON DOC./ (%)/ ASSET TYPE DATE (A$M) CALL DATE TYPE PROGRAMME MARGIN About Groupe BPCE 110/ Senior roupe BPCE, the second-largest banking group 26 Apr 18 600 26 Apr 23 BBSW FRN preferred Kangaroo Senior non- in France by domestic market share, includes two 26 Apr 18 330 26 Apr 28 4.50 Fixed preferred Kangaroo independent and complementary cooperative retail 27 Oct 15 175 27 Oct 20* 5.40 Fixed T2 Kangaroo banking networks: the network of 14 Banque Senior 24 Apr 15 450 24 Apr 20 3.50 Fixed preferred Kangaroo Populaire banks and the network of 15 Caisses 130/ 24 Apr 15 350 24 Apr 20 FRN Senior Kangaroo Gd’Epargne. It also operates through Credit Foncier in the area of BBSW preferred residential-mortgage and real-estate financing. Groupe BPCE T2 data is listed to call date. is a major player in asset and wealth management, insurance, * 10NC5: Fixed for first five years, then if not called reset at five-year AUD corporate and investment banking, and specialised financial semi-quarterly mid-swap rate plus 320bps (final maturity date 27 Oct 2025). services through Natixis. SOURCE: GROUPE BPCE JUNE 2018 Groupe BPCE, with its 106,500 employees, serves a total of FOR FURTHER INFORMATION PLEASE CONTACT: 31 million customers and enjoys a strong local presence in France with 7,800 branches and nine million cooperative shareholders. Roland Charbonnel Director Group Funding & Investor Relations In retail banking, the Group is active only in the French domestic [email protected] market, whereas Natixis, the wholesale bank of the Group, is +33 1 5840 6930 more international. www.groupebpce.fr
30|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 overall responsibility for the group’s liquidity and funding. The HANDELSBANKEN maturity structure of funding and the liquidity position are monitored closely. Short-term funding is mainly raised through CP programmes in Sweden, Europe and the US. These programmes are supplemented by borrowing in the international interbank market. COMPANY DATA Long-term funding is, among other things, raised through LISTING JURISDICTION/EXCHANGE Sweden/NASDAQ Stockholm issuance of covered bonds in the name of Stadshypotek, FINANCIAL YEAR-END DATE 31 Dec mainly in Swedish kronor in the domestic market, and use of BLOOMBERG TICKER SHBA:AA the bank’s other available funding programmes. The bank aims MARKET CAPITALISATION SEK218bn (30 Sep 18) to have a well-balanced funding mix between covered and senior-unsecured bonds. CREDIT METRICS BANK SENIOR CREDIT RATINGS (S&P/M/F) AA-/Aa2/AA (all stable) AUD activity AT1 DEBT RATINGS (S&P/M/F) BBB/Baa3/BBB+ T2 DEBT RATINGS (S&P/M/F) A-/A3/AA- Handelsbanken plans to issue in the Australian dollar market NET STABLE-FUNDING RATIO 103% (30 Jun 18) on a regular but not frequent basis. On 27 September 2018, LIQUIDITY-COVERAGE RATIO 146% (30 Jun 18) Handelsbanken issued a five-year, A$900 million bond with CET1/TOTAL CAPITAL RATIO 21.4%/28.3% (30 Jun 18) fixed and floating-rate tranches. TOTAL SIZE OF ASSET BOOK/ RISK-WEIGHTED ASSETS TOTAL ASSETS SEK3,134bn (30 Jun 18) DEBT MATURITY PROFILE TOTAL RISK-EXPOSURE AMOUNT SEK554bn (30 Jun 18) Covered bonds Senior unsecured Subordinated loans FUNDING METRICS (30 JUN 18) 250 WHOLESALE FUNDING BREAKDOWN 11 35% 200 SHORT-TERM WHOLESALE 21 = (CDs +CPs)/total wholesale funding 69 LONG-TERM WHOLESALE 65% 150 64 WHOLESALE FUNDING BREAKDOWN 63 3 COVERED BONDS 44% 100 51 8 CERTIFICATES OF DEPOSIT 26% 138 15 116 OTHER BONDS 19% 50 99 76 5 COMMERCIAL PAPER 10% VOLUME (SEKBN EQUIV.) 69 73 SUBORDINATED DEBT 3% 0 26 2018 2019 2020 2021 2022 2023 2024+ About Handelsbanken ounded in 1871, Handelsbanken is one of the leading OUTSTANDING AUD BONDS banks in the Nordic region, with more than 800 FIRST ISSUE VOLUME MATURITY/ COUPON (%) COUPON ASSET DOC./ DATE (A$M) CALL DATE /MARGIN TYPE TYPE PROGRAMME branches in more than 20 countries. The bank regards 20 Sep 18 700 27 Sep 23 98/BBSW FRN Senior MTN Sweden, Denmark, Finland, Norway, the UK and the 20 Sep 18 200 27 Sep 23 3.25 Fixed Senior MTN Netherlands as its domestic markets. 2 Mar 16 500 2 Mar 21 150/BBSW FRN Senior MTN Handelsbanken’s financial goal is to have higher profitability F 2 Mar 16 125 2 Mar 26 4.00 Fixed Senior MTN than the average of its competitors through having more 10 Apr 14 450 10 Apr 19 4.50 Fixed Senior MTN satisfied customers and lower costs – including loan losses – 10 Apr 14 200 10 Apr 19 95/BBSW FRN Senior MTN than its competitors. This goal has been reached every year AUD bonds outstanding at 30 September 2018. since 1972. SOURCE: HANDELSBANKEN OCTOBER 2018 Handelsbanken targets corporate and private customers with a better-than-average cash flow. The business focus is always on profitability and never on volume. As a result, the bank has no sales targets or market-share goals.
FOR FURTHER INFORMATION PLEASE CONTACT: Funding strategy Handelsbanken is a regular issuer of short- and long-term debt Mattias Lidgren Head of Funding in the domestic and international markets. The objective is to [email protected] have a well-diversified funding structure in terms of currency, +46 8 701 5237 market and product. The central treasury department has https:/handelsbanken.se/ireng
31 ISSUER PROFILES
HYPO VORARLBERG
COMPANY DATA stands for lasting, real, personal relationships, superb advisory in a LISTING JURISDICTION/EXCHANGE Not listed business-class atmosphere and excellent, award-winning financial FINANCIAL YEAR-END DATE 31 Dec products and services. As a result, the bank provides forward- BLOOMBERG TICKER VORHYP looking solutions for those with ambitious plans and a desire to MARKET CAPITALISATION Not applicable focus on fulfilling their goals and wishes.
CREDIT METRICS Funding strategy BANK SENIOR CREDIT RATINGS (S&P/M) A+/A3 (both stable) Hypo Vorarlberg is a flexible issuer that addresses national and AT1 DEBT RATINGS None T2 DEBT RATINGS (M) Baa3 international investors. It has three funding pillars. These are NET STABLE-FUNDING RATIO 108.66% (30 Jun 18) public benchmark bonds – covered and senior-unsecured – LIQUIDITY-COVERAGE RATIO 144% (30 Jun 18) private placements of EMTN and registered securities, and a CET1/TOTAL CAPITAL RATIO 14.35%/17.84% (30 Jun 18) retail funding arm. Besides its presence in the EUR and CHF TOTAL SIZE OF ASSET BOOK/ €9.4bn/€7.1bn (30 Jun 18) RISK-WEIGHTED ASSETS market, the bank aims to broaden its investor base.
FUNDING METRICS (30 SEP 18) AUD activity WHOLESALE FUNDING BREAKDOWN In May 2018 Hypo Vorarlberg established a Kangaroo SHORT-TERM WHOLESALE 13.95% programme and set up investor meetings in Asia and Australia to LONG-TERM WHOLESALE 86.05% promote a potential inaugural AUD transaction. WEIGHTED-AVERAGE TERM-DEBT MATURITY 4.58 yrs WHOLESALE FUNDING BREAKDOWN COVERED BONDS 56.53% SENIOR-UNSECURED (PREFERRED) 38.71% TERM DEBT MATURITY PROFILE (ALL CURRENCIES) T2 3.93% AT1 0.83% Covered bonds Senior unsecured T2 & AT1 TOTAL OUTSTANDING TERM-DEBT ISSUANCE BY CURRENCY 1,200 EUR 91.20% CHF 8.05% 1,000 OTHER 0.75% 263 800 4 110 About Hypo Vorarlberg M EQUIV.) 255 50 10 € 600 ypo Vorarlberg was founded in 1897 by the parliament 722 50 87 100 of Vorarlberg. With the state of Vorarlberg as majority 400 799 63
shareholder (76.0308%), the bank acts in the interest of VOLUME ( 605 520 520 413 500 the people and corporates in its core regions. 200 50 108 223 130121 150 Hypo Vorarlberg sees itself as a regional bank that 11 11 93 94 7 15 operates internationally. The bank’s core markets are Vorarlberg, 0 3 5 11 H 2018 2019 2020 2021 2022 2023 2024 20252026 2027 2028 2029 2030+ the neighbouring Lake Constance (eastern Switzerland and AT1 and T2 data is listed to call date. southern Germany) and selected regions of Austria. In Vienna, SOURCE: HYPO VORARLBERG OCTOBER 2018 Graz and Wels the bank has established itself as a strong partner in business with corporate clients and high-end private customers. Hypo Vorarlberg is a comprehensive financial-services group. Besides traditional banking products, the bank offers leasing, FOR FURTHER INFORMATION PLEASE CONTACT: insurance and real-estate products through its subsidiaries in Austria and South Tyrol. Alexander Boor Head of Funding and Investor Relations Hypo Vorarlberg has three business sectors: corporate [email protected] customer business, real-estate funding and the investment +43 50 414 1491 business. It is the entrepreneurial bank from Vorarlberg and it www.hypovbg.at/investor-relations
32|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 LANDESBANK BADEN-WÜRTTEMBERG
COMPANY DATA AUD activity LISTING JURISDICTION/EXCHANGE Not listed LBBW uses the Australian dollar for benchmark subordinated FINANCIAL YEAR-END DATE 31 Dec bonds and in smaller volume for retail-targeted domestic notes. BLOOMBERG TICKER LBBW After being absent from larger Australian dollar transactions MARKET CAPITALISATION Not applicable for several years, LBBW issued AUD T2 benchmarks in 2017 and 2018. This follows LBBW’s strategy of diversifying its CREDIT METRICS funding base by reaching international investors that have not BANK SENIOR CREDIT RATINGS (M/F) Aa3/A- (both stable) been active investors in LBBW. AT1 DEBT RATINGS Not applicable T2 DEBT RATINGS (M/F) Baa2/BBB NET STABLE-FUNDING RATIO Not applicable BENCHMARK DEBT MATURITY PROFILE (ALL CURRENCIES) LIQUIDITY-COVERAGE RATIO 144.6% (fully loaded) (30 Jun 18) CET1/TOTAL CAPITAL RATIO 14.9%/21.5% (fully loaded) (30 Jun 18) Covered bond Senior unsecured T2 TOTAL SIZE OF ASSET BOOK/ €258.5bn/€79.1bn (30 Jun 18) RISK-WEIGHTED ASSETS 4,000 3,500 500 3,000 500 About Landesbank Baden-Württemberg 2,500 750 187
ith deep roots in the German state of Baden- M EQUIV.)
€ 2,000 1,500 Württemberg, Landesbank Baden-Württemberg 1,200 3,000 1,500 (LBBW) is also present in a number of economic 2,106 1,000 2,148
and financial hubs worldwide. VOLUME ( 500 1,065 1,000 1,000 LBBW provides its services as a mid-sized 500 500 185 154 universal bank to companies, retail and institutional customers 0 W 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 and savings banks. LBBW also fulfils the role of a central bank for the savings banks in Baden-Württemberg, Rhineland- T2 data is listed to call date. Palatinate und Saxony. OUTSTANDING AUD BONDS Having total assets worth €259 billion makes LBBW one of COUPON FIRST ISSUE VOLUME MATURITY/ COUPON DOC./ (%)/ ASSET TYPE the largest banks in Germany. The LBBW Group has more than DATE (A$M) CALL DATE TYPE PROGRAMME MARGIN 10,000 employees working at 160 locations throughout Germany. 17 May 18 450 17 May 28 5.00 Fixed Subordinated EMTN The bank also looks after its customers abroad with 17 locations Base 27 Feb 18 35 27 Feb 20 2.00 Step-up Senior prospectus worldwide including New York, London and Singapore. callable (domestic) 29 Jun 17 300 29 Jun 27 4.90 Fixed Subordinated EMTN Funding strategy AUD bonds outstanding at 30 September 2018. LBBW’s funding strategy is determined by the asset-liability T2 data is listed to call date. committee. The group focuses on ensuring a balanced overall SOURCE: LANDESBANK BADEN-WÜRTTEMBERG OCTOBER 2018 structure in terms of the groups of products and investors reached. In the capital markets, LBBW issues mortgage-backed and public-sector Pfandbriefe (covered bonds), senior-unsecured bonds and subordinated bonds. LBBW is an active issuer in the public bond markets as well as in private placements. Bonds are issued predominantly in euro. Besides euro, the most important currencies are US dollar and sterling, followed by noncore dollars. FOR FURTHER INFORMATION PLEASE CONTACT: To broaden and diversify its funding base, LBBW intends to continue extending its range of refinancing instruments. In the Andreas Wein Head of Funding and Investor Relations first half of 2018, for example, it issued a green covered bond [email protected] and a sterling mortgage covered bond. +49 711 127 28113 www.lbbw.de
33 ISSUER PROFILES
Lloyds Banking Group is one of the largest companies in the LLOYDS BANKING GROUP FTSE 100.
Funding strategy The group estimates it has a steady-state funding requirement of £15-20 billion per year. The group will continue to diversify its wholesale funding across currencies and platforms. COMPANY DATA LISTING JURISDICTION/EXCHANGE UK, US/LSE, NYSE AUD activity FINANCIAL YEAR-END DATE 31 Dec The Australian dollar continues to be a strategic funding currency. BLOOMBERG TICKER LSE: LLOY/NYSE: LYG MARKET CAPITALISATION LSE: £45bn/NYSE US$2bn (30 Jun 18) The AUD market offers investor diversification and funding at levels competitive with the bank’s global credit curve. Lloyds CREDIT METRICS Banking Group will continue its engagement with this market as BANK SENIOR CREDIT RATINGS (S&P/M/F) part of its global funding platform. HOLDCO [LLOYDS BANKING GROUP] BBB+/A3/A+ OPCO [LLOYDS BANK] A+/Aa3/A+ DEBT MATURITY PROFILE OPCO [LBCM] A/A1/A Covered bonds ABS/RMBS Senior unsecured (opco) AT1 DEBT RATINGS (HOLDCO) (S&P/M/F) BB-/Baa3/BB+ T2 DEBT RATINGS (HOLDCO) (S&P/M/F) BBB-/Baa1/A- Senior unsecured (holdco) T2 AT1 NET STABLE-FUNDING RATIO N/A 16 LIQUIDITY-COVERAGE RATIO (EBA) 129% (30 Jun 18) 14 CET1/TOTAL CAPITAL RATIO 14.5%/21.6% (30 Jun 18) (PRO-FORMA BASIS) 12 TOTAL SIZE OF ASSET BOOK/ RISK-WEIGHTED ASSETS1 £830bn/£207bn (30 Jun 18) 10 1. RWA figure is inclusive of the sale of the Irish mortgage portfolio. 8 6 FUNDING METRICS (30 JUN 18) 4 WHOLESALE FUNDING BREAKDOWN VOLUME (£BN EQUIV.) SHORT-TERM WHOLESALE 31% (of £122bn) 2 LONG-TERM WHOLESALE 69% (of £122bn) 0 WEIGHTED-AVERAGE TERM-DEBT MATURITY Around 5 yrs 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029+ WHOLESALE FUNDING BREAKDOWN AT1 and T2 data is listed to call date. MONEY-MARKET FUNDING 25% OPCO FUNDING 22% OUTSTANDING AUD BONDS COVERED BONDS 21% FIRST ISSUE VOLUME MATURITY/ COUPON (%) COUPON ASSET DOC./ DATE (A$M) CALL DATE /MARGIN TYPE TYPE PROGRAMME SUBORDINATED DEBT 15% LLOYDS BANK PLC HOLDCO SENIOR 14% 28 Aug 15 400 28 Aug 25 4.25 Fixed Senior Kangaroo SECURITISATION 3% 1 Apr 15 400 1 Apr 20 3.25 Fixed Senior Kangaroo TOTAL OUTSTANDING TERM-DEBT ISSUANCE 1 Apr 15 200 1 Apr 20 110/BBSW FRN Senior Kangaroo BY CURRENCY (ALL TENORS) LLOYDS BANKING GROUP PLC USD 35% 23 May 18 150 23 May 28 4.75 Fixed Senior Kangaroo EUR 34% 23 May 18 250 23 Nov 23 3.90 Fixed Senior Kangaroo GBP 25% 7 Mar 18 325 7 Mar 25 140/BBSW FRN Senior Kangaroo OTHER 6% 7 Mar 18 425 7 Mar 25 4.00 Fixed Senior Kangaroo 22 Nov 17 450 22 Nov 27 4.25 Fixed Senior Kangaroo About Lloyds Banking Group 20 Sep 17 400 20 Mar 23 3.65 Fixed Senior Kangaroo loyds Banking Group is a leading UK-based financial- 20 Sep 17 250 20 Mar 23 130/BBSW FRN Senior Kangaroo services group providing a wide range of banking and AUD outstanding at 12 October 2018 – public deals only. financial services, focused on personal and commercial SOURCE: LLOYDS BANKING GROUP OCTOBER 2018 customers. The group’s main business activities are retail, FOR FURTHER INFORMATION PLEASE CONTACT: commercial and corporate banking, general insurance, and life, Peter Green L Head of Public Senior Funding and Covered Bonds pensions and investment provision. The group operates the UK’s largest retail bank and has a large and diversified customer base. [email protected] +44 20 7158 2145 Services are offered through a number of well-recognised Vishal Savadia brands including Lloyds Bank, Halifax, Bank of Scotland, and Head of Capital Issuance, Ratings and Debt IR Scottish Widows, as well as a range of distribution channels. [email protected] This includes the largest branch network in the UK and +44 20 7158 2155 comprehensive digital, telephony and mobile services. www.lloydsbanking.com
34|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 AUD activity MIZUHO Mizuho Bank has full domestic banking operations through its Sydney branch, which has been servicing the Asia-Pacific region for many years. As a result, it has a strong profile in the regular issuance of domestic NCDs as well as through highly successful term AUD bonds issued over the years. The Sydney branch remains a pivotal operation for Mizuho Financial Group as it is COMPANY DATA one of the largest international balance sheets of all the Mizuho LISTING JURISDICTION/EXCHANGE Japan/TSE foreign branches and a key source of continued growth for the FINANCIAL YEAR-END DATE 31 Mar group. BLOOMBERG TICKER MIZUHO (bond corporate ticker code) To facilitate this continued growth, the Sydney branch and MARKET CAPITALISATION ¥4,969.3bn (Oct 18) Mizuho Financial Group will continue to engage and issue in Australia. Branch-based issuance is repo-eligible while recent CREDIT METRICS TLAC-eligible notes have provided the investment market with BANK SENIOR CREDIT RATINGS (S&P/M/F) diversification which Mizuho Financial Group will continue to MIZUHO FINANCIAL GROUP A-/A1/A- MIZUHO BANK A/A1/A- offer in the years ahead. MIZUHO TRUST & BANKING A/A1/A- MIZUHO SECURITIES A/A1/– TERM DEBT MATURITY PROFILE (ALL CURRENCIES) SUBORDINATED NOTES DEBT RATINGS (S&P/M) BBB/A2 Senior TLAC T2 & AT1 LIQUIDITY-COVERAGE RATIO 121.3% (Jun 18) CET1/TOTAL CAPITAL RATIO 12.68%/18.05% (Jun 18) 12 TOTAL SIZE OF ASSET BOOK/ ¥207tn/¥60tn (Jun 18) RISK-WEIGHTED ASSETS 10 2.1 8 2.8 3.5 FUNDING METRICS (OCT 18) WEIGHTED-AVERAGE TERM-DEBT MATURITY 7.9 yrs 6 4.7 WHOLESALE FUNDING BREAKDOWN 2.5 3.0 1.7 7.6 SHORT-TERM WHOLESALE (TERM BONDS 4 5.2 4.9 4.8 MATURING WITHIN 12 MONTHS) 13% 2.4 2.7 2.4 LONG-TERM WHOLESALE 87% VOLUME (US$BN EQUIV.) 2 3.5 1.0 2.8 0.4 TOTAL OUTSTANDING TERM-DEBT ISSUANCE 1.8 1.4 1.3 1.6 1.9 0.8 1.0 1.0 1.0 0.2 BY CURRENCY 0 0.1 0.1 USD 47% 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 JPY 46% AT1 and T2 data listed to call date. EUR 3% AUD 3% OUTSTANDING AUD BONDS OTHER 1% FIRST ISSUE VOLUME MATURITY/ COUPON (%) COUPON ASSET DOC./ DATE (A$M) CALL DATE /MARGIN TYPE TYPE PROGRAMME About Mizuho MIZUHO FINANCIAL GROUP izuho Financial Group is one of the largest financial 19 Jul 18 275 19 Jul 23 3.752 Fixed TLAC SEC-regd. 19 Jul 18 350 19 Jul 23 140/BBSW FRN TLAC SEC-regd. institutions in the world, offering comprehensive MIZUHO BANK (SYDNEY) financial and strategic services – including banking, 26 Jul 18 110 26 Jul 23 2.59 Fixed Senior EMTN securities, trust and asset management, credit cards, 26 Jul 17 125 26 Jul 22 2.77 Fixed Senior EMTN private banking and venture capital – through its 23 Aug 16 600 23 Aug 19 110/BBSW FRN Senior TCD group companies including Mizuho Bank and Mizuho Securities. 22 Jul 16 50 22 Jul 26 3.38 Fixed Senior EMTN M 27 Jul 16 190 27 Jul 21 2.62 Fixed Senior EMTN The group has more than 60,000 employees across 38 15 Jan 16 50 15 Jan 26 3.92 Fixed Senior EMTN countries and regions. This scale allows it to cover 80% of the 28 Jul 15 220 28 Jul 20 3.23 Fixed Senior EMTN Forbes Global 200 companies. 28 May 15 700 28 May 20 105/BBSW FRN Senior TCD 28 Jan 15 230 25 Jan 19 2.76 Fixed Senior EMTN Funding strategy 30 Oct 14 250 30 Oct 18 3.17 Fixed Senior EMTN
Mizuho Financial Group and its related entities are active and SOURCE: MIZUHO OCTOBER 2018 frequent issuers in all the major global financial markets. Regular issuance is undertaken across a range of currencies, products, FOR FURTHER INFORMATION PLEASE CONTACT: tenors and capital ranking types. As the group continues its Mizuho Group Investor Relations organic and inorganic expansion around the world, it will +81 3 5224 2029 continue to seek new opportunities and innovative funding [email protected] channels as well as returning to core markets. www.mizuho-fg.com/investors/index.html
35 KangaNews online has even more of the breaking debt-market news and in-depth analysis you need. The TCD programme is a locally established operating MUFG BANK company format programme rated A by S&P Global Ratings – which is one notch higher in credit than holdco issuances. As of the end of October 2018 there was A$5.4 billion outstanding under the programme. MUFG Bank is the only entity within the group that issues term debt in Oceania. COMPANY DATA (MITSUBISHI UFJ FINANCIAL GROUP) LISTING JURISDICTION/EXCHANGE Japan, US/TSE, NSE, NYSE TERM DEBT MATURITY PROFILE (ALL CURRENCIES) FINANCIAL YEAR-END DATE 31 Mar Senior unsecured (MUFG) (LHS) AT1 (all entities) (RHS) BLOOMBERG TICKER MUFG Senior unsecured (MUFG Bank) (LHS) Tier-two (all entities) (RHS) MARKET CAPITALISATION ¥9.6tn (30 Apr 18) Senior unsecured (The Trust Bank) (LHS)
CREDIT METRICS 7 800 BANK SENIOR CREDIT RATINGS (S&P/M/F) 0.8 700 MITSUBISHI UFJ FINANCIAL GROUP A-/A1/A 6 2.2 MUFG BANK, LTD. (MUFG BANK) A/A1/A 1.2 600 5 LIQUIDITY-COVERAGE RATIO (MITSUBISHI UFJ FINANCIAL GROUP) 144.8% (for 3 months to 31 Mar 18) 0.3 501 500 4 1.6
CET1/TOTAL CAPITAL RATIO 496 400 BN EQUIV.) (MITSUBISHI UFJ FINANCIAL GROUP) 12.58%/16.56% (31 Mar 18) 89 ¥ 3 4.1 3.6 5.9 TOTAL SIZE OF ASSET BOOK/ 300 RISK-WEIGHTED ASSETS ¥306.9tn/¥113.4tn (31 Mar 18) 10 2 272 4.2 (MITSUBISHI UFJ FINANCIAL GROUP) 200 3.2
330 VOLUME ( VOLUME (US$BN EQUIV.) 1 222 250 1.5 170 100 1.0 100 About MUFG Bank 0 0 UFG Bank is a major commercial-banking 2018 2019 2020 2021 2022 *Figures for all senior unsecured have been converted into USD with actual organisation in Japan. It provides a broad range of exchange rates as of end of Mar 18. Excluding structured bond and notes issued by overseas branches and subsidiaries. Maturity profile to 2022 domestic and international banking services from only. its offices in Japan and around the world. MUFG * Figures are as of end Mar 18 assuming that all callable notes are to be redeemed on its first callable date. AT1 and T2 contain Basel II T1 preferred Bank is a “city” bank as opposed to a regional securities and Basel II T2 sub notes issued by MUFG Bank and The Trust Mbank. Bank respectively. OUTSTANDING AUD BONDS Funding strategy FIRST ISSUE VOLUME MATURITY/ COUPON (%) COUPON ASSET DOC./ DATE (A$M) CALL DATE /MARGIN TYPE TYPE PROGRAMME Customer deposits now cover 60-70% of non-JPY loans. To MUFG BANK SYDNEY BRANCH further increase deposits, MUFG Bank is focused on product 20 Sep 18 750 20 Sep 21 85/BBSW FRN Senior TCD development and enhancing sales capabilities. 24 Aug 18 200 24 Aug 20 72/BBSW FRN Senior TCD With mid-to-long term funding through corporate bond 27 Jul 18 100 24 Feb 20 63/BBSW FRN Senior TCD issuance and currency swaps, all non-JPY loans are fully funded. 22 May 18 300 23 May 19 52/BBSW FRN Senior TCD 20 Mar 18 500 20 Mar 23 98/BBSW FRN Senior TCD Corporate bonds are mainly issued from the holdco (MUFG) to 20 Mar 18 150 20 Mar 23 3.40% Fixed Senior TCD ensure stable funding and TLAC requirement. Currency swaps 24 Aug 17 400 24 Aug 20 76/BBSW FRN Senior TCD are transacted mainly in medium-term durations. 24 Aug 17 150 24 Aug 20 2.75% Fixed Senior TCD 30 May 17 100 30 May 19 75/BBSW FRN Senior TCD AUD activity 9 Mar 17 650 9 Mar 21 100/BBSW FRN Senior TCD MUFG Bank is well established within the Oceania region. 9 Mar 17 150 9 Mar 21 3.25% Fixed Senior TCD 30 Sep 16 550 30 Sep 19 102/BBSW FRN Senior TCD The bank operates a ‘full branch’ status in Australia and New 30 Sep 16 150 30 Sep 19 2.75% Fixed Senior TCD Zealand, with wide-reaching product capabilities and deep 16 Mar 16 500 16 Mar 20 150/BBSW FRN Senior TCD corporate and institutional client relationships. The bank is 13 Mar 15 600 13 Mar 19 97/BBSW FRN Senior TCD one of the largest foreign banks in Australia with total resident 13 Mar 15 150 13 Mar 19 3.25% Fixed Senior TCD assets as at 30 September 2018 of A$22.459 billion (APRA). All bonds are senior unsecured. To support the balance-sheet size and expected growth SOURCE: MUFG BANK NOVEMBER 2018 within the region the bank has a well-diversified portfolio of FOR FURTHER INFORMATION PLEASE CONTACT: funding sources including senior-unsecured debt issuance. MUFG Bank Sydney branch began issuing in 2012 and Phillip Anderson Head of Corporate Communications, MUFG Bank, Oceania currently issues senior-unsecured debt in TCD format – [email protected] offering fixed and FRN tranches for tenors ranging from 1-5 +61 2 9296 1358/ +61 403 684 386 years. https://www.mufg.jp/english/ir/
37 ISSUER PROFILES
NATIONAL AUSTRALIA BANK
COMPANY DATA insurance franchises in New Zealand, operating under the Bank LISTING JURISDICTION/EXCHANGE Australia/ASX of New Zealand (BNZ) brand. FINANCIAL YEAR-END DATE 30 Sep As a domestic specialist with a global offering, NAB is in BLOOMBERG TICKER NAB Corp a position to support its customers globally, offering specific MARKET CAPITALISATION A$75.9bn (21 Sep 18) expertise around debt capital markets, real-asset investments, fixed-income solutions, asset servicing and regulation that CREDIT METRICS draws on local and deep offshore relationships. BANK SENIOR CREDIT RATINGS (S&P/M/F) AA-/Aa3/AA- AT1 DEBT RATINGS (S&P/M/F) Transaction dependent T2 DEBT RATINGS (S&P/M/F) Transaction dependent Funding strategy NET STABLE-FUNDING RATIO 113% (30 Sep 18) The Group maintains a well-diversified funding profile across LIQUIDITY-COVERAGE RATIO 129% (Sep 18 quarterly average) issuance type, currency, investor location and tenor. It raised CET1/TOTAL CAPITAL RATIO 10.20%/14.12% (30 Sep 18) A$25.1 billion during the September 2018 financial year. NAB TOTAL SIZE OF ASSET BOOK/ RISK-WEIGHTED ASSETS A$806.5bn/A$389.7bn (30 Sep 18) raised A$25.1 billion, including A$21.6 billion senior-unsecured and A$3.5 billion of secured funding (comprised of covered FUNDING METRICS (30 SEP 18) bonds and RMBS). WHOLESALE FUNDING BREAKDOWN1 SHORT-TERM WHOLESALE 38% AUD activity LONG-TERM WHOLESALE 62% The domestic market is one of NAB’s core funding markets. 2 WEIGHTED-AVERAGE TERM-DEBT MATURITY 3.46 yrs NAB is a consistent issuer of Australian dollars across a WHOLESALE FUNDING BREAKDOWN SENIOR 73% number of products including senior-unsecured bonds, RMBS, COVERED BONDS 14% T2 and covered bonds. AT1 6% Taking into account the benefits the bank receives from T2 4% funding in its domestic market and home currency, NAB looks SECURITISED 3% to support the market in every way in which it can, including TOTAL OUTSTANDING TERM DEBT ISSUANCE BY CURRENCY innovating with new products – such as its social bond and USD 34% listening to the emerging trends of the investor base – so NAB AUD 31% can best satisfy investors’ requirements. EUR 22% GBP 4% TERM DEBT MATURITY PROFILE (ALL CURRENCIES) JPY 4% CHF 2% Covered bonds Senior unsecured Additional capital HKD 1% (AT1 & T2) CNY 1% 35 OTHER 1% 30 2.7 1. Term is based on original tenor, not remaining. 5.8 1.1 2. Only >1yr original maturities; is on a residual-maturity basis (ie, 25 includes all term debt with a remaining tenor of <1yr); excludes hybrids. 20 1.5 1.4 25.1 About National Australia Bank 15 18.1 ational Australia Bank (NAB) employs more than 24.2 10 14.8 30,000 people serving nine million customers at 14.1 VOLUME (A$BN EQUIV.) 5 0.3 more than 900 locations in Australia, New Zealand 4.7 0.7 6.7 3.7 0.7 1.6 1.9 3.6 3.2 3.2 2.6 and around the world, including in its key trading and 0 1.8 1.0 1.2 0.5 1.9 0.4 1.4 investment markets of Asia, the UK and the US. 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030+ NAB’s portfolio includes personal- and business-banking AT1 and T2 data is listed to first call date.
N SOURCE: NATIONAL AUSTRALIA BANK SEPTEMBER 2018 products and services. The bank caters to customers’ needs with specialist expertise in agribusiness, property, health, government, education and community. The New Zealand banking portfolio comprises the retail, business, corporate and
38|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 OUTSTANDING AUD BONDS
FIRST ISSUE VOLUME MATURITY/ COUPON (%)/ COUPON ASSET DOC./ FIRST ISSUE VOLUME MATURITY/ COUPON (%)/ COUPON ASSET DOC./ DATE (A$M) CALL DATE MARGIN TYPE TYPE PROGRAMME DATE (A$M) CALL DATE MARGIN TYPE TYPE PROGRAMME
26 Sep 18 1,725 26 Sep 23 93/BBSW FRN Senior DIP 11 Mar 14 750 11 Mar 24 5.00 Fixed Covered DIP 26 Sep 18 275 26 Sep 23 N /A Variable Senior DIP 7 Feb 14 100 7 May 21 5.00 Fixed Senior GMTN 3 Jul 18 40 8 Aug 22 6.00 Fixed Senior DIP 17 Jan 14 225 17 Jan 20 5.00 Fixed Senior GMTN 3 Jul 18 40 3 Jul 25 2.835 Fixed Senior GMTN 17 Dec 13 1,702 16 Dec 20 325/BBSW FRN AT1 Standalone 27 Jun 18 108 27 Jun 23 2.89 Fixed Senior GMTN 25 Nov 13 125 25 Nov 19 4.75 Fixed Senior GMTN 16 May 18 1,400 16 May 23 90/BBSW FRN Senior DIP Zero 21 Nov 13 11 13 Nov 20 0.00 Senior GMTN 16 May 18 750 16 Apr 21 70/BBSW FRN Senior DIP coupon 16 May 18 550 16 Apr 21 2.75 Fixed Senior DIP 8 Nov 13 1,123 8 Nov 18 88/BBSW FRN Senior DIP 12 Apr 18 30 12 Apr 33 3.956 Fixed Senior GMTN 10 Sep 13 125 10 Sep 19 4.75 Fixed Senior GMTN 27 Mar 18 80 27 Mar 28 3.75 Fixed Senior DIP 30 Jul 13 40 30 Jul 20 90/BBSW FRN Senior GMTN 16 Mar 18 1,050 16 Mar 23 65/BBSW FRN Covered DIP 27 Jun 13 30 27 Jun 23 5.0425 Fixed Senior GMTN 16 Mar 18 325 16 Mar 23 3.00 Fixed Covered DIP 18 Jun 13 20 18 Jun 20 4.60 Fixed Senior GMTN 16 Mar 18 125 16 Mar 28 3.60 Fixed Covered DIP 6 Jun 13 225 6 Jun 19 4.125 Fixed Senior GMTN 9 Mar 18 35 9 Mar 38 4.10 Fixed Senior GMTN 28 Mar 13 45 28 Mar 20 105/BBSW FRN Senior GMTN 27 Feb 18 30 27 Feb 38 4.328 Fixed Senior GMTN 28 Mar 13 30 28 Mar 20 5.095 Fixed Senior GMTN 11 Dec 17 100 11 Dec 24 3.25 Fixed Senior GMTN 20 Mar 13 1,497 20 Mar 19 320/BBSW FRN AT1 Standalone 10 Nov 17 1,875 10 Feb 23 80/BBSW FRN Senior DIP 22 Jan 13 300 22 Jan 19 4.50 Fixed Senior GMTN 10 Nov 17 375 10 Feb 23 3.00 Fixed Senior DIP 26 Sep 12 7 26 Sep 22 5.36 Fixed Senior GMTN Zero 3 Aug 17 2,150 4 Aug 20 62/BBSW FRN Senior DIP 31 May 12 69 31 May 32 0 Senior GMTN coupon 3 Aug 17 250 4 Aug 20 2.70 Fixed Senior DIP 23 Jul 10 80 23 Jul 20 7.082 Fixed Senior GMTN 5 Jul 17 2,050 5 Jul 22 90/BBSW FRN Senior DIP 19 Jul 10 20 19 Jul 20 7.10 Fixed Senior GMTN 5 Jul 17 200 5 Jul 22 3.00 Fixed Senior DIP 7 Jul 10 20 7 Jul 20 7.205 Fixed Senior GMTN 26 Jun 17 100 21 Jun 21 2.26 Fixed Senior GMTN 25 Jun 10 15 25 Jun 20 7.245 Fixed Senior GMTN 25 May 17 100 25 May 27 3.75 Fixed Senior DIP 24 Jun 10 25 24 Jun 20 7.22 Fixed Senior GMTN 24 Mar 17 500 24 Mar 22 3.25 Fixed Senior DIP 21 Jun 10 12 21 Jun 20 N /A Variable Senior GMTN 24 Mar 17 26 24 Mar 22 3.00 Fixed Senior GMTN 29 Jun 99 1,945 31 Mar 68 1.25 FRN AT1 Standalone 20 Mar 17 943 20 Sep 28 220/BBSW FRN T2 DIP 16 Feb 17 100 16 Feb 21 3.08 Fixed Senior DIP Outstanding AUD term debt to 30 September 2018 excluding securitisation. Excludes issuance under 18 months. Senior bonds all 2 Feb 17 176 2 Feb 22 2.94 Fixed Senior GMTN unsecured. AT1 and T2 maturity dates are first call date. 19 Jan 17 275 19 Jan 32 5.00 Fixed T2 GMTN SOURCE: NATIONAL AUSTRALIA BANK SEPTEMBER 2018 21 Oct 16 1,500 21 Oct 21 105/BBSW FRN Senior DIP 21 Oct 16 250 21 Oct 21 3.00 Fixed Senior DIP 21 Sep 16 650 21 Sep 26 240/BBSW FRN T2 DIP 21 Sep 16 150 21 Sep 26 N /A Variable T2 DIP 20 Jul 16 52 20 Jul 21 2.53 Fixed Senior GMTN 7 Jul 16 1,499 7 Jul 22 495/BBSW FRN AT1 Standalone 12 May 16 2,900 12 May 21 117/BBSW FRN Senior DIP 12 May 16 300 12 May 21 3.00 Fixed Senior DIP 10 Mar 16 30 10 Mar 21 3.40 Fixed Senior GMTN 25 Feb 16 1,853 25 Feb 19 2.9337 FRN Senior DIP 5 Nov 15 2,100 5 Nov 20 98/BBSW FRN Senior DIP 3 Jun 15 1,900 3 Jun 20 108/BBSW FRN Senior DIP 26 Mar 15 1,100 26 Mar 25 185/BBSW FRN T2 DIP 24 Mar 15 25 24 Mar 20 2.83 Fixed Senior GMTN 23 Mar 15 1,343 23 Mar 20 350/BBSW FRN AT1 Standalone 30 Dec 14 30 30 Dec 24 4.13 Fixed Senior DIP 16 Dec 14 300 16 Dec 21 4.00 Fixed Senior DIP 27 Aug 14 2,200 27 Nov 19 82/BBSW FRN Senior DIP 27 Aug 14 250 27 Nov 19 4.00 Fixed Senior DIP 11 Jul 14 10 11 Jul 24 4.8425 Fixed Senior GMTN FOR FURTHER INFORMATION PLEASE CONTACT: 30 Jun 14 88 28 Jun 19 3.52 Fixed Senior GMTN Eva Zileli 25 Jun 14 205 25 Jun 24 5.00 Fixed Senior DIP Head of Group Funding 13 Jun 14 50 13 Jun 24 4.9875 Fixed Senior GMTN [email protected] 20 May 14 1,725 20 May 19 85/BBSW FRN Senior DIP +61 3 8634 8219 20 May 14 500 20 May 19 4.25 Fixed Senior DIP https://capital.nab.com.au/home/contact.phps
39 ISSUER PROFILES
RABOBANK
About Rabobank abobank is an international financial-services provider operating on the basis of cooperative principles. It offers retail, wholesale and private banking, leasing COMPANY DATA and real-estate services. The bank emerged from LISTING JURISDICTION/EXCHANGE Not listed small agricultural cooperative banks, which were first FINANCIAL YEAR-END DATE 31 Dec founded by Dutch farmers and horticulturists in the late 19th BLOOMBERG TICKER RABOBK Corp R century. This cooperative foundation and philosophy have MARKET CAPITALISATION Not applicable remained Rabobank’s guiding principles throughout its history. Today the bank serves more than 6.7 million retail and CREDIT METRICS 800,000 business customers in the Netherlands. It is also active BANK SENIOR CREDIT RATINGS (S&P/M/F) internationally as a financial-services provider in the food and PREFERRED A+/Aa3/AA- (positive, stable, stable) NONPREFERRED A-/A3/AA- agriculture sectors. Rabobank is committed to making the AT1 DEBT RATINGS (M/F) Baa3/BBB- difference as a leading cooperative and customer-oriented bank T2 DEBT RATINGS (S&P/M/F) BBB+/Baa1/A locally through Banking for the Netherlands and worldwide NET STABLE-FUNDING RATIO 119% (30 Jun 18) through Banking for Food. LIQUIDITY-COVERAGE RATIO 136% (30 Jun 18) Rabobank strives to be a rock-solid bank by targeting strong CET1/TOTAL CAPITAL RATIO 15.8%/26.1% (30 Jun 18) capital ratios, having a flexible balance sheet and at the same TOTAL SIZE OF ASSET BOOK/ €607.8bn/€199.3bn (30 Jun 18) RISK-WEIGHTED ASSETS time investing in digitalisation and innovation.
FUNDING METRICS (31 DEC 17) Funding strategy WHOLESALE FUNDING BREAKDOWN Rabobank takes a global and flexible approach to wholesale SHORT-TERM WHOLESALE 23.5% funding by diversifying across markets, currencies, products and LONG-TERM WHOLESALE 76.5% maturities. LONG-TERM WHOLESALE FUNDING BREAKDOWN The bank also continues to demonstrate continuity and MTN 71% commitment by maintaining liquid benchmark curves in EUR, SECURITISED 14% USD, AUD and NZD, at the same time retaining flexibility to SUBORDINATED 13% COVERED BONDS 2% issue in other strategic markets. UNSECURED LONG-TERM BONDS Other than being active in public benchmark format, BY CURRENCY Rabobank is also active in the niche-currency, private- EUR 52% USD 22% placement, and structured-note markets. AUD 7% GBP 6% AUD activity JPY 4% Rabobank has a material presence in Australia’s food and OTHER 9% agriculture sectors, which means funding raised by Rabobank in the Australian domestic market is predominantly used to fund its local balance sheet. Rabobank has been a longstanding issuer in the AUD bond market and has a dedicated domestic funding programme. The bank also has ability to issue AUD- denominated debt in EMTN and Uridashi formats, as well as tapping into the AUD market for issuance of capital instruments.
40|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 FIRST ISSUE VOLUME MATURITY/ COUPON (%) COUPON DOC./ ASSET TYPE SENIOR UNSECURED MATURITY PROFILE (ALL CURRENCIES)* DATE (A$M) CALL DATE /MARGIN TYPE PROGRAMME
Senior unsecured Senior DIP – 4 Feb 14 600 4 Feb 19 105/BBSW FRN unsecured Kangaroo 25 Senior DIP – 25 Sep 13 1,050 25 Sep 18 113/BBSW FRN unsecured Kangaroo Senior 20 25 Sep 13 100 25 Sep 19 5.00 Fixed GMTN unsecured 19.3 Senior 19 Jun 13 225 19 Sep 18 4.125 Fixed GMTN 15 unsecured 15.9 Senior BN EQUIV.) 14.4 14.1 5 Apr 13 100 5 Apr 19 4.625 Fixed GMTN
€ unsecured 10 Inflation- Senior DIP – 28 Feb 07 436 28 Aug 20 2.805 linked unsecured Kangaroo Senior DIP –
VOLUME ( 8 Sep 05 15 8 Sep 25 5.50 Fixed 5 unsecured Kangaroo
AUD outstanding at 30 June 2018. Data is for senior-unsecured issuances 0 outstanding in the name of Rabobank Australia Branch.
2018 2019 2020 2021 SOURCE: RABOBANK 30 JUNE 2018 * Data to December 2021 only.
OUTSTANDING AUD BONDS
FIRST ISSUE VOLUME MATURITY/ COUPON (%) COUPON DOC./ ASSET TYPE DATE (A$M) CALL DATE /MARGIN TYPE PROGRAMME
Senior GMTN – 4 Jun 18 121 6 Jun 22 2.57 Fixed unsecured Uridashi Senior DIP – 7 Mar 18 200 6 Aug 19 40/BBSW FRN unsecured Kangaroo Senior DIP – 25 Jan 18 150 25 Jan 23 3.25 Fixed unsecured Kangaroo Senior DIP – 25 Jan 18 350 25 Jan 23 77/BBSW FRN unsecured Kangaroo Senior GMTN – 27 Jun 17 18 28 Jun 21 2.06 Fixed unsecured Uridashi Senior DIP – 7 Jun 17 150 7 Dec 18 48/BBSW FRN unsecured Kangaroo Senior GMTN – 30 May 17 15 27 May 22 2.41 Fixed unsecured Uridashi Senior DIP – 3 Mar 17 500 3 Mar 22 108/BBSW FRN unsecured Kangaroo Senior 23 May 16 150 23 Aug 21 3.00 Fixed GMTN unsecured Senior DIP – 4 Mar 16 800 4 Mar 21 150/BBSW FRN unsecured Kangaroo Senior 2 Mar 16 800 3 Mar 21 3.375 Fixed GMTN unsecured Senior DIP – 12 Nov 15 320 12 May 26 4.25 Fixed unsecured Kangaroo Senior 29 May 15 100 29 Jun 20 3.375 Fixed GMTN unsecured Senior 20 Mar 15 100 22 Jul 19 3.00 Fixed GMTN unsecured Senior DIP – 11 Feb 15 150 11 Feb 20 3.25 Fixed unsecured Kangaroo Senior DIP – 11 Feb 15 750 11 Feb 20 105/BBSW FRN unsecured Kangaroo Senior 27 Jan 15 150 21 Aug 20 3.25 Fixed GMTN unsecured Senior 2 Dec 14 100 13 Jan 22 4.25 Fixed GMTN unsecured Senior DIP – 11 Apr 14 300 11 Apr 24 5.50 Fixed FOR FURTHER INFORMATION PLEASE CONTACT: unsecured Kangaroo Pratik Keshav Senior Manager, Long Term Funding and Capital – Australia and New Zealand [email protected] +61 2 8115 3113 www.rabobank.com/en/investors/index
41 ISSUER PROFILES
SHINHAN BANK
COMPANY DATA Shinhan continues to monitor for funding opportunities and LISTING JURISDICTION/EXCHANGE Korea, US/KRX, NYSE diversification. FINANCIAL YEAR-END DATE 31 Dec BLOOMBERG TICKER SHNHAN AUD activity MARKET CAPITALISATION KRW21.41tn (1 Oct 18) Shinhan was the first Korean bank to issue a benchmark Kangaroo in 2007, and has continued to access the AUD CREDIT METRICS market regularly in both senior and T2 format under the bank’s BANK SENIOR CREDIT RATINGS (S&P/M/F) Kangaroo programme. Shinhan has a Sydney branch office and BANK A+/Aa3/A (all stable) HOLDING COMPANY –/A1 /– (stable) its assets in Australian dollars were approximately A$891 million AT1 DEBT RATINGS Not applicable as of June 2018. Shinhan’s most recent AUD issuance was a T2 DEBT RATINGS (S&P/M/F) BBB+/ Baa1 /BBB+ debut T2 format in July 2018 and it was the first of its kind from NET STABLE-FUNDING RATIO 111% (30 Jun 18) a Korean bank. LIQUIDITY-COVERAGE RATIO 99% (30 Jun 18) CET1/TOTAL CAPITAL RATIO 13.2%/16.2% (30 Jun 8) TOTAL SIZE OF ASSET BOOK/ TERM DEBT MATURITY PROFILE (ALL CURRENCIES) RISK-WEIGHTED ASSETS KRW346.4tn/KRW167tn (30 Jun 18) Senior unsecured Subordinated debt (T2) 1,400 FUNDING METRICS (31 AUG 18) TOTAL OUTSTANDING TERM-DEBT ISSUANCE 1,200 BY CURRENCY USD 70% 1,000 500 AUD 17% 800 JPY 6% HKD 4% 600 CAD 1% 824 400 730 688 EUR 615 575 1% 499 500 VOLUME (US$M EQUIV.) OTHER 1.7% 200 350 179 0 About Shinhan Bank 2018 2019 2020 2021 2022 2023 2026 2027 2028 hinahn bank (Shinhan) is a leading commercial bank in T2 data is listed to call date. Korea and is the main operating subsidiary of Shinhan Financial Group. The bank was established in 1982 as OUTSTANDING AUD BONDS FIRST ISSUE VOLUME MATURITY/ COUPON (%) COUPON ASSET DOC./ the first privately funded commercial bank in Korea. DATE (A$M) CALL DATE /MARGIN TYPE TYPE PROGRAMME With approximately 13,400 employees and 900 30 Aug 18 400 30 Aug 28 0.05 Fixed T2 Kangaroo domestic branches nationwide, Shinan provides retail, corporate 6 Aug 18 300 6 Aug 19 74/BBSW FRN Senior Kangaroo S 17 Mar 17 100 17 Mar 21 0.035 Fixed Senior Kangaroo and investment-banking services to its customers. Globally, Shinhan operates 163 overseas networks across 20 countries in 17 Mar 17 300 17 Mar 21 110/BBSW FRN Senior Kangaroo SOURCE: SHINHAN BANK 31 AUGUST 2018 Asia, the Americas and EMEA. The bank’s current credit ratings are A+, Aa3, and A by S&P Global Ratings, Moody’s Investors Service and Fitch Ratings, respectively, which is the highest among peer commercial banks in Korea.
Funding strategy Shinhan is one of the most active issuers from Korea and FOR FURTHER INFORMATION PLEASE CONTACT: regularly accesses the major global financial markets for its funding requirement. While most of Shinhan’s foreign- HyeJin Kwon Senior Manager currency funding is in USD, the bank regularly monitors other [email protected] currency markets in which its overseas network is present. +82 2 2151 3967 AUD, JPY, EUR and CNY are the major non-USD currencies http://shinhangroup.com/en/invest/main.jsp
42|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 SOCIETE GENERALE The group’s debt policy is based on two principles. First, to maintain an active policy of diversifying the sources of refinancing issued in the capital market in order to guarantee its stability. Second, to adopt a group refinancing structure that COMPANY DATA consistently matches the maturities of its assets and liabilities. LISTING JURISDICTION/EXCHANGE France/Euronext FINANCIAL YEAR-END DATE 31 Dec AUD activity BLOOMBERG TICKER GLE FP Societe Generale is a regular issuer in the Australian market MARKET CAPITALISATION €30.4bn (27 Sep 18) as part of the group’s funding-diversification policy. Until 2018, this debt was mostly issued in T2 format. In 2018, the CREDIT METRICS bank successfully launched its inaugural dual-tranche senior- BANK SENIOR CREDIT RATINGS (S&P/M/F) A/A1/A+ (positive, stable, stable) SENIOR NONPREFERRED DEBT RATINGS nonpreferred transaction. BBB+/Baa2/A (S&P/M/F) Looking forward, Societe Generale intends to continue AT1 DEBT RATINGS (S&P/M/F) BB+/Ba2/BB+ issuing debt in Australian dollars subject to market conditions. In T2 DEBT RATINGS (S&P/M/F) BBB/Baa3/A- NET STABLE-FUNDING RATIO >100% (30 Jun 18) addition to issuance out of its EMTN programme, the bank may LIQUIDITY-COVERAGE RATIO 124% average value in Q2 2018 consider issuing in Kangaroo format, in view, in particular, of CET1/TOTAL CAPITAL RATIO 11.1%/16.8% (fully loaded) (30 Jun 18) reopening a branch in Australia. TOTAL SIZE OF ASSET BOOK (IFRS)/ RISK-WEIGHTED ASSETS €1,298bn/€363.1bn (30 Jun 18) TERM DEBT MATURITY PROFILE (ALL CURRENCIES) FUNDING METRICS (30 JUN 18) WHOLESALE FUNDING BREAKDOWN 40
SENIOR STRUCTURED 29% 35 36.2 COVERED BONDS 14% 30 SENIOR VANILLA PREFERRED UNSECURED 14% 25 LONG-TERM INTERBANK LIABILITIES 14% 26.0 23.4 T2 BN EQUIV.) 20
9% € SUBSIDIARIES (INCLUDES CONDUITS AND 17.7 15 16.0 SECURITISED DEBT) 9% AT1 6% 10 12.5 10.4 9.8 VOLUME ( SENIOR NONPREFERRED 5% 5 7.3 3.8 4.1 About Societe Generale 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 >2027 ociete Generale is one of Europe’s leading financial- At 30 June 2018. Subordinated debt is listed to call date. services groups. Based on a diversified and integrated banking model, the group combines financial strength OUTSTANDING AUD BONDS FIRST ISSUE VOLUME MATURITY/ COUPON COUPON DOC./ ASSET TYPE and proven expertise in innovation with a strategy of DATE (A$M) CALL DATE (%) TYPE PROGRAMME sustainable growth. 20 Sep 18 100 20 Sep 28 4.70 Fixed Senior non- EMTN Active in the real economy for more than 150 years, with a preferred S 20 Sep 18 450 20 Sep 23 3.925 Fixed Senior non- EMTN solid position in Europe and connected to the rest of the world, preferred Societe Generale has more than 147,000 members of staff in 67 19 May 17 650 19 May 27 5.00 Fixed T2 EMTN countries and supports 31 million individual clients, businesses 24 Jan 17 200 24 Jan 29 5.00 Fixed T2 EMTN and institutional investors on a daily basis by offering a wide 13 Oct 16 150 13 Oct 26 4.875 Fixed T2 EMTN 20 Jul 16 325 20 Jul 28 5.00 Fixed T2 EMTN range of advisory services and tailored financial solutions. The 10 Jun 15 50 10 Jun 25 5.70 Fixed T2 EMTN group is built on three complementary core businesses: French 2 Jun 15 125 2 Jun 27 5.50 Fixed T2 EMTN retail banking, international retail banking, insurance and financial AUD bonds outstanding at 20 September 2018. services to corporates, and global banking and investor solutions. Subordinated debt is listed to call date. SOURCE: SOCIETE GENERALE SEPTEMBER 2018
Funding strategy FOR FURTHER INFORMATION PLEASE CONTACT: The Societe Generale Group’s debt policy is designed not only to ensure financing for the growth of the core businesses’ Vincent Robillard Head of Funding and Collateral Management, Societe Generale Group commercial activities and debt renewal, but also to maintain [email protected] repayment schedules that are compatible with the group’s ability +33 1 57 29 53 35 to access the market and its future growth. www.societegenerale.com/en/investors
43 ISSUER PROFILES
SUMITOMO MITSUI FINANCIAL GROUP SUMITOMO MITSUI BANKING CORPORATION
COMPANY DATA banks in Japan and can trace the origin of its banking business LISTING JURISDICTION/EXCHANGE Japan, US/TSE, NYSE back to the 17th century. FINANCIAL YEAR-END DATE 31 Mar SMFG is one of the three largest banking groups in BLOOMBERG TICKER SUMIBK Japan, with an established presence across all the consumer MARKET CAPITALISATION ¥6.1tn (31 Aug 18) and corporate banking sectors. Its subsidiaries also include Sumitomo Mitsui Finance and Leasing Company Limited in the CREDIT METRICS leasing business, SMBC Nikko Securities Inc in the securities BANK SENIOR CREDIT RATINGS (S&P/M/F) business, and Sumitomo Mitsui Card Company Limited, HOLDCO A-/A1/A (positive, stable, stable) OPCO A/A1/A (positive, stable, stable) Cedyna Financial Corporation and SMBC Consumer Finance T2 DEBT RATINGS (S&P/M/F) BBB+/A2/BBB+ Co. Ltd. in the consumer-finance business, as well as The NET STABLE-FUNDING RATIO Not applicable Japan Research Institute Limited and Sumitomo Mitsui Asset LIQUIDITY-COVERAGE RATIO 127.7% (average Jan-Mar 18) Management Company Limited in the information-technology CET1/TOTAL CAPITAL RATIO 14.5%/19.36% (31 Mar 18) services and asset-management business, respectively. TOTAL SIZE OF ASSET BOOK/ ¥199tn/¥63.5tn (31 Mar 18) RISK-WEIGHTED ASSETS Funding strategy FUNDING METRICS (NON-JPY BASE) (31 MAR 18) SMFG is the issuing entity for TLAC senior bonds with longer FUNDING BREAKDOWN1 maturities – five years or longer. SMBC issues shorter-term – CDS & CP 18% 2-3 years – senior bonds based on its funding needs . MID-TO-LONG TERM FUNDING 24% For fiscal year ending 31 March 2019, the senior bond DEPOSITS (INCLUDING DEPOSITS FROM CENTRAL BANKS) 58% funding plan for SMFG and SMBC is around US$17 billion. WEIGHTED-AVERAGE TERM-DEBT MATURITY2,3 6.3 yrs AUD activity FUNDING BREAKDOWN BY ENTITY/SECURITY
TYPE2 SMBC has operated in Australia for more than 30 years. A SENIOR HOLDCO 53% strong balance sheet, relationship focus and corporate and SENIOR OPCO 40% project finance competencies have allowed SMBC to support SUBORDINATED 7% TOTAL OUTSTANDING LONG-TERM DEBT clients throughout the credit cycle and to develop a strong ISSUANCE BY CURRENCY2 industry position with leading Australian institutions. USD 81% SMBC established a representative office in Sydney in EUR 14% AUD 4% 1984 in order to support Japanese corporate customers. In OTHER 1% June 2006, SMBC obtained its banking licence from Australian Prudential Regulation Authority and its Australian Financial 1. Sum of SMBC, SMBC Europe and SMBC (China). 2. Sum of SMFG and SMBC. Excluding JPY funding, certificate of deposits Services Licence from Australian Securities and Investments and transferable deposits. Among all bonds priced by 31 March 2018, Commission. SMBC Sydney Branch formally opened in only includes issuance with original maturity of two years or more as of 31 March 2018. August 2006, followed by SMBC Perth Branch in April 2013 3. Weighted-average term-debt maturity includes callable instruments to (collectively, SMBC Australia). first call date. John Ferreira, SMBC’s country head, Australia, comments: “SMBC Australia has grown steadily, developing leading About Sumitomo Mitsui Financial Group and Sumitomo Mitsui positions in its key target markets of corporate banking, Banking Corporation syndications and project finance with top-tier Australian umitomo Mitsui Financial Group, Inc. (SMFG) is a companies. The business model places primary emphasis on joint-stock company incorporated on 2 December 2002 long-term and trusted customer relationships.” with limited liability under the laws of Japan. SMFG is a SMBC Australia has maintained a strong credit profile holding company that directly owns 100% of the issued through this significant growth phase. The bank is committed and outstanding shares of Sumitomo Mitsui Banking to maintaining a presence in Australian funding markets with SCorporation (SMBC), which is one of the largest commercial repo-eligible, public-issuance TCDs to diversify its funding
44|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 base. SMBC Australia’s funding sources are diversified across TERM DEBT MATURITY PROFILE (ALL CURRENCIES) domestic and offshore investors and include a range of products including NCD, ECD, TCD and deposits. Senior (SMBC) Senior (SMFG) Subordinated Australia is now one of the most important countries for 12 the SMBC Group franchise. To better serve customers’ needs for a diverse and broader product range, it’s subsidiaries SMBC 10 Nikko Captial Markets and SMBC Leasing & Finance Inc 1.5 8 have also opened local offices in Sydney offering products and solutions in DCM and lease financing respectively. 6 0.9 6.6 7.7 2.5 4 7.4 OUTSTANDING AUD BONDS 6.9 6.9
COUPON VOLUME (US$BN EQUIV.) 2 1.8 1.5 FIRST ISSUE VOLUME MATURITY/ COUPON DOC./ 2.8 (%)/ ASSET TYPE DATE (A$M) CALL DATE TYPE PROGRAMME 1.8 0.6 4.4 MARGIN 1.6 1.3 1.3 0 0.5 SUMITOMO MITSUI FINANCIAL GROUP FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 Senior 10 Jul 18 50 10 Jul 28 3.90 Fixed EMTN unsecured Callable debt is listed to call date. Senior 22 May 18 78 22 May 28 4.01 Fixed EMTN Converted into USD at exchange rates as of 31 March 2018. unsecured SOURCE: SUMITOMO MITSUI BANKING CORPORATION SEPTEMBER 2018 Senior 16 Mar 18 85 16 Mar 28 3.97 Fixed EMTN unsecured Senior 30 Oct 17 100 30 Oct 27 4.00 Fixed EMTN unsecured Senior 28 Sep 17 50 28 Sep 27 4.13 Fixed EMTN unsecured Senior SEC 7 Sep 17 300 7 Mar 23 3.604 Fixed unsecured registered 120/ Senior SEC 7 Sep 17 450 7 Mar 23 FRN BBSW unsecured registered Senior 27 Jul 17 50 27 Jul 27 4.092 Fixed EMTN unsecured Senior 21 Jun 17 74 21 Jun 27 3.80 Fixed EMTN unsecured Senior SEC 29 Mar 17 300 29 Mar 22 3.662 Fixed unsecured registered 1 2 7/ Senior SEC 29 Mar 17 700 29 Mar 22 FRN BBSW unsecured registered Senior 29 Sep 16 95 29 Sep 26 3.40 Fixed EMTN unsecured SUMITOMO MITSUI BANKING CORPORATION 75/ Senior Sydney 20 Aug 18 700 20 Aug 20 FRN BBSW unsecured branch/TCD 63/ Senior Sydney 25 Jul 18 100 24 Feb 20 FRN BBSW unsecured branch/TCD 73/ Senior Sydney 20 Jul 18 200 20 Jul 20 FRN BBSW unsecured branch/TCD 1 1 7/ Deposit Sydney 19 Jul 16 500 19 Jul 19 FRN BBSW notes branch/TCD 115/ Deposit Sydney 3 Dec 15 600 3 Dec 18 FRN BBSW notes branch/TCD FOR FURTHER INFORMATION PLEASE CONTACT: Senior Uridashi/ 24 Aug 15 170 24 Aug 20 3.10 Fixed unsecured EMTN Atsushi Ouchiyama 102/ Deposit Sydney 7 Apr 15 850 7 Apr 20 FRN Senior Vice President, Debt Strategy and Issuance Group BBSW notes branch/TCD Corporate Treasury Department Senior Uridashi/ 23 Mar 15 120 11 Mar 20 2.97 Fixed Sumitomo Mitsui Financial Group unsecured EMTN [email protected] Senior 5 Mar 15 50 5 Mar 25 3.67 Fixed EMTN unsecured +81 3 6706 8251 Senior Uridashi/ 29 Dec 14 190 5 Dec 18 3.12 Fixed Matthew Heddou unsecured EMTN Senior Vice President, Head of Funding and ALM Senior 16 Sep 14 100 16 Sep 19 3.875 Fixed EMTN unsecured Treasury Department SMBC Sydney Branch Senior Uridashi/ 10 Mar 14 150 11 Mar 19 4.13 Fixed unsecured EMTN [email protected] +61 2 9231 0522 (ext 823) SOURCE: SUMITOMO MITSUI BANKING CORPORATION 30 SEPTEMBER 2018 www.smfg.co.jp/english/investor/debt/index.html
45 ISSUER PROFILES
SUNCORP-METWAY
COMPANY DATA operates multiple debt programmes in a diverse range of LISTING JURISDICTION/EXCHANGE Australia/ASX markets and currencies. FINANCIAL YEAR-END DATE 30 Jun BLOOMBERG TICKER SUN AU AUD activity MARKET CAPITALISATION (A$) A$18.8bn (30 Jun 18) The bulk of Suncorp-Metway’s funding is in Australian dollars. The bank executed A$5.5 billion equivalent in term wholesale CREDIT METRICS issuance over FY18 at a weighted average term of 3.5 years. BANK SENIOR CREDIT RATINGS (S&P/M/F) A+/A+/A1 (all stable) This included issuance under domestic and offshore senior SUN GROUP AT1 DEBT RATINGS Not applicable SUN GROUP T2 DEBT RATINGS (S&P/F) BBB+/A- unsecured, covered-bond and RMBS programmes. In the NET STABLE-FUNDING RATIO 112% (30 Jun 18) four months to the end of October 2018, the bank issued a The average LCR for FY18 was 123%, A$750 million covered bond and a A$500 million increase to its ending the year at 139%, above internal LIQUIDITY-COVERAGE RATIO operating targets and APRA’s 100% limit August 2022 floating-rate note, while Suncorp Group issued a (30 Jun 18) A$600 million tier-two transaction. CET1/TOTAL CAPITAL RATIO 9.07%/13.52% (30 Jun 18) TOTAL SIZE OF ASSET BOOK AND RISK-WEIGHTED ASSETS TERM DEBT MATURITY PROFILE (ALL CURRENCIES) BANK ASSETS A$66.1bn (30 Jun 18) GROUP ASSETS A$99bn (30 Jun 18) Covered bonds Senior unsecured RISK-WEIGHTED ASSETS A$32.6bn (30 Jun 18) 4,000 FUNDING METRICS (30 JUN 18) 3,500 WHOLESALE FUNDING BREAKDOWN 3,000 SHORT-TERM WHOLESALE 33% 2,500 LONG-TERM WHOLESALE 67% 2,429 WEIGHTED-AVERAGE TERM-DEBT MATURITY 3.4 yrs 2,000
WHOLESALE FUNDING BREAKDOWN 1,500 SENIOR 51% 2,619 1,000 SECURITISATION 31% 750 1,671 VOLUME (A$M EQUIV.) 25 COVERED BONDS 13% 500 800 950 750 SUBORDINATED 5% 500 600 0 TOTAL OUTSTANDING TERM-DEBT ISSUANCE BY CURRENCY 2018 2019 2020 2021 2022 2023 2026 AUD 81% USD 19% OUTSTANDING AUD BONDS COUPON FIRST ISSUE VOLUME MATURITY/ COUPON DOC./ (%)/ ASSET TYPE DATE (A$M) CALL DATE TYPE PROGRAMME MARGIN About Suncorp-Metway SUNCORP-METWAY uncorp-Metway Limited is part of the Suncorp 5 Sep 18 550 13 Sep 23 3.00 Fixed Covered Covered bond 7 7/ Group. It has assets of approximately A$66.1 billion, 5 Sep 18 200 13 Sep 23 FRN Covered Covered bond BBSW with A$58.7 billion being total lending assets. The 215/ 9 Aug 18 600 5 Dec 28 FRN T2 MTN bulk of the bank’s lending is retail home lending BBSW 70/ Senior 16 Jul 18 100 18 Jun 20 FRN MTN (81% or A$47.6 billion), with some 11% commercial BBSW unsecured 50/ Senior SME and 8% agribusiness. 25 Jun 18 100 25 Jun 19 FRN MTN S BBSW unsecured The bank has a strong credit rating of A+/A1/A+. It is a 49/ Senior 20 Mar 18 150 6 Aug 19 FRN MTN conservative home lender with a focus on high-quality loans BBSW unsecured 35/ Senior and very low bad debts (5bps at the end of September 2018). 29 Jan 18 200 5 Feb 19 FRN MTN BBSW unsecured 35/ Senior 13 Nov 17 100 13 Nov 18 FRN MTN Funding strategy BBSW unsecured 35/ Senior 30 Oct 17 150 2 Nov 18 FRN MTN Suncorp-Metway has a typical annual funding requirement BBSW unsecured of A$4-6 billion. The bank issues in multiple currencies with 49/ Senior 23 Oct 17 100 6 Aug 19 FRN MTN all funds swapped into Australian dollars. Suncorp-Metway BBSW unsecured
46|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 COUPON FIRST ISSUE VOLUME MATURITY/ COUPON DOC./ (%)/ ASSET TYPE DATE (A$M) CALL DATE TYPE PROGRAMME MARGIN 56/ Senior 27 Sep 17 100 3 Oct 19 FRN MTN BBSW unsecured 97/ Senior 9 Aug 17 1,000 16 Aug 22 FRN MTN BBSW unsecured 68/ Senior 7 Jul 17 250 12 Aug 19 FRN MTN BBSW unsecured 50/ Senior 15 Jun 17 100 10 Dec 18 FRN MTN BBSW unsecured Senior 17 Nov 16 25 23 Nov 26 4.00 Fixed MTN unsecured 75/ Senior 5 Oct 16 350 12 Oct 18 FRN MTN BBSW unsecured 80/ Senior 23 Sep 16 100 4 Oct 18 FRN MTN BBSW unsecured 16 Aug 16 600 24 Aug 26 3.25 Fixed Covered Covered bond 110/ 15 Jun 16 500 22 Jun 21 FRN Covered Covered bond BBSW 138/ Senior 6 Apr 16 600 12 Apr 21 FRN MTN BBSW unsecured Senior remember 6 Apr 16 150 12 Apr 21 3.50 Fixed MTN unsecured 125/ Senior 13 Oct 15 550 20 Oct 20 FRN MTN BBSW unsecured Senior 13 Oct 15 200 20 Oct 20 3.50 Fixed MTN unsecured 70/ 23 Oct 14 700 5 Nov 19 FRN Covered Covered bond BBSW 23 Oct 14 250 5 Nov 19 3.75 Fixed Covered Covered bond KangaNews content is protected 94/ Senior 13 Aug 14 100 20 Aug 19 FRN MTN BBSW unsecured by copyright. 110/ Senior 14 Apr 14 750 23 Apr 19 FRN MTN You cannot systematically reproduce BBSW unsecured 75/ 26 Nov 98 72 Perpetual FRN Perpetual N /A or forward any of our content – BBSW SUNCORP GROUP whether print or online. 215/ 9 Aug 18 600 5 Dec 28 FRN T2 MTN BBSW 285/ 10 Apr 13 770 22 Nov 23 FRN CPS N /A Please make sure both you and your BBSW AAI company are protected from any 320/ 27 Sep 16 330 6 Oct 42 FRN T2 MTN BBSW intellectual property breaches. 330/ 11 Nov 15 225 18 Nov 40 FRN T2 MTN BBSW If you would like to discuss how we Subordinated debt is listed to final maturity date.
SOURCE: SUNCORP METWAY OCTOBER 2018 can help you use our information in the most effective and compliant way, please contact Jeremy Masters.
[email protected] +61 2 8256 5577 FOR FURTHER INFORMATION PLEASE CONTACT: Simon Lewis Deputy Treasurer [email protected] +61 7 3362 4037 www.suncorpgroup.com.au/investors ISSUER PROFILES
TD
About TD D is the sixth-largest bank in North America by number of branches and serves more than 25 million COMPANY DATA customers in three key businesses operating in a LISTING JURISDICTION/EXCHANGE Canada, US/TSX, NYSE (ticker: TD) number of locations in financial centres around the FINANCIAL YEAR-END DATE 31 Oct globe. The first is Canadian retail, which includes BLOOMBERG TICKER TD:CN the Canadian personal and commercial banking, wealth and MARKET CAPITALISATION C$140.9bn (31 Jul 18) T insurance businesses. Next is US retail, which includes the US personal and business banking operations, wealth management CREDIT METRICS services and the bank’s investment in TD Ameritrade. Third is BANK SENIOR CREDIT RATINGS (S&P/M/DBRS) wholesale banking. LEGACY SENIOR DEBT1 AA-/Aa1/AA TD also ranks among the world’s leading online financial- SENIOR DEBT2 A/Aa3/Aa (low) (positive/stable/stable) services firms, with approximately 12 million active online and AT1 DEBT RATINGS (PREFERRED SHARES) BBB+/Baa1/Pfd-2 (high) (S&P/M/DBRS) (NVCC) mobile customers. TD had C$1.3 trillion in assets on 31 July T2 DEBT RATINGS (SUBORDINATED DEBT) (S&P/M/DBRS) (NVCC) A/A2/A (high) 2018. OSFI is targeting an implementation date NET STABLE-FUNDING RATIO of January 2020 for Canadian banks Funding strategy LIQUIDITY-COVERAGE RATIO – TOTAL 127% (31 Jul 18) UNWEIGHTED VALUE (AVERAGE)3 TD has access to a variety of unsecured and secured funding CET14/TOTAL CAPITAL RATIO 11.7%/15.4% (31 Jul 18) sources. TD’s funding activities are conducted in accordance TOTAL SIZE OF ASSET BOOK/ RISK-WEIGHTED ASSETS C$1,292.5m/C$428.9m (31 Jul 18) with a liquidity-management policy that requires assets to be funded to the appropriate term and to a prudent diversification 1. Includes: (a) senior debt issued prior to September 23 2018 and (b) senior debt issued on or after September 23 2018 which is excluded profile. TD’s primary approach to managing funding activities from the bank recapitalisation bail-in regime. is to maximise the use of deposits raised through personal- and 2. Subject to conversion under the bank recapitalisation bail-in regime. 3. Unweighted inflow and outflow values are outstanding balances commercial-banking channels. maturing or callable within 30 days. TD actively maintains various registered external wholesale 4. Amounts are calculated in accordance with the Basel III regulatory framework and are presented based on the all-in methodology. The term (greater than one year) funding programmes to CVA capital charge is being phased in until the first quarter of 2019. provide access to diversified funding sources, including asset For fiscal 2017, the scalars for inclusion of CVA for CET1, T1, and total capital RWA were 72%, 77% and 81%, respectively. For fiscal 2018, the securitisation, covered bonds and unsecured wholesale debt. corresponding scalars are 80%, 83% and 86%, respectively. The bank also raises term funding through Canadian senior notes, Canadian National Housing Association MBS, Canada FUNDING METRICS (31 JUL 18) mortgage bonds, debt issued in Australia, and notes backed by WHOLESALE FUNDING BREAKDOWN SHORT-TERM WHOLESALE 50% credit-card receivables (Evergreen Credit Card Trust). LONG-TERM WHOLESALE 50% TD’s wholesale funding is diversified by geography, WEIGHTED-AVERAGE TERM-DEBT MATURITY 4.5 yrs currency and funding types. TD raises short-term (one year WHOLESALE FUNDING BREAKDOWN and less) funding using certificates of deposit and commercial SENIOR UNSECURED 49% paper. COVERED BONDS 25% TD regularly evaluates opportunities to diversify its funding SECURITISED 15% CAPITAL (INCLUDES PREFERRED SHARES, into new markets and to new investors so as to manage funding 11% INNOVATIVE T1 AND SUBORDINATED DEBT) risk and cost. TOTAL OUTSTANDING TERM-DEBT ISSUANCE
BY CURRENCY TD maintains depositor concentration limits against CAD 39% short-term wholesale deposits so it does not depend on small USD 36% groups of depositors for funding. TD further limits short- EUR 17% term wholesale funding maturity concentration in an effort to GBP 5% AUD 3% mitigate exposures to refinancing risk during stress events.
AUD activity TD continues to be active in the Australian dollar market. Its most recent transaction was a A$1 billion floating-rate note issued in September 2018, the largest single-tranche Kangaroo bond of the year to date.
48|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 As of 31 July 2018, the bank had notes outstanding totalling OUTSTANDING AUD BONDS
A$4 billion in covered and senior-unsecured format with term FIRST ISSUE VOLUME MATURITY/ COUPON (%)/ COUPON ASSET DOC./ to maturities of 1-10 years, representing 3% of the bank’s DATE (A$M) CALL DATE MARGIN TYPE TYPE PROGRAMME Australian outstanding wholesale term debt. 23 Jul 18 400 26 Jul 19 46/BBSW FRN Senior debt issuance programme Australian TERM DEBT MATURITY PROFILE (ALL CURRENCIES) 6 Mar 18 300 13 Mar 19 35/BBSW FRN Senior debt issuance programme Covered bonds Securitisation (ABS/RMBS) Australian 7 Sep 17 350 17 Sep 18 85/BBSW FRN Senior debt issuance Senior unsecured T2 & AT1 programme 40 Australian 15 Mar 16 200 22 Dec 20 3.70 Fixed Senior debt issuance programme 35 5.9 Australian 15 Mar 16 600 22 Dec 20 141/BBSW FRN Senior debt issuance 30 4.6 programme 3.5 Australian 25 4.6 29 Jan 16 125 4 Feb 26 4.00 Fixed Senior debt issuance programme 16.2 20 0.7 Australian 17.1 11 Sep 15 50 7 Aug 25 4.20 Fixed Senior debt issuance 17.0 15 13.1 programme 1.2 2.9 9.1 Australian 10 7 Sep 15 650 17 Sep 18 85/BBSW FRN Senior debt issuance
VOLUME (C$BN EQUIV.) 5.4 5.3 programme 4.2 1.8 10.7 3.0 5 5.9 1.7 Australian 2.0 0.4 0.2 0.2 3.2 3 Sep 15 25 7 Aug 25 4.20 Fixed Senior debt issuance 5.6 5.1 4.6 5.0 0.5 2.4 1.9 1.5 0.1 programme 0 0.8 Australian 2018 2019 2020 2021 2022 2023 2024 2025 2026 31 Jul 15 160 7 Aug 25 4.20 Fixed Senior debt issuance T2 and AT1 data listed to call date. programme UKLA Covered covered bond 31 Oct 14 1,000 6 Nov 19 63/BBSW FRN programme FOR FURTHER INFORMATION PLEASE CONTACT: bond (Australian wrapper) Brooke Hales AVP, Treasury & Balance Sheet Management Total outstanding issuance at 31 July 2018. [email protected] SOURCE: TD SEPTEMBER 2018 +1 416 307 8647 www.td.com/investor-relations/ir-homepage/ir-homepage/ investor-index.jsp KangaNews Yearbooks This is the inaugural edition of the Financial Institution Yearbook, a welcome addition to the KangaNews stable of sector-based yearbooks. KangaNews would like to thank TD for partnering with us on this project. If you would like your institution to be featured in the 2019 edition, or would like further information on KangaNews, please contact Samantha Swiss, chief executive [email protected]
49 ISSUER PROFILES
WESTPAC BANKING CORPORATION and institutional banking, and wealth-management services. With a strong position in its home markets and 14 million customers, Westpac focuses on organic growth, increasing customer numbers in chosen segments and building stronger COMPANY DATA and deeper customer relationships. LISTING JURISDICTION/EXCHANGE Australia/ASX A key element of Westpac’s approach is its unique portfolio FINANCIAL YEAR-END DATE 30 Sep of financial-services brands, which enables the Group to appeal BLOOMBERG TICKER WSTP to a broader range of customers and provides the strategic MARKET CAPITALISATION (A$) A$96bn (30 Sep 18) flexibility to offer solutions that better meet customer needs. Westpac has a strong financial position with consistent CREDIT METRICS profitability, capital, funding and liquidity positions comfortably BANK SENIOR CREDIT RATINGS (OPCO ONLY) AA-/Aa3/AA- (negative/stable/stable) (S&P/M/F) above regulatory minima and a high level of asset quality and AT1 DEBT RATINGS Not available for retail provisioning. This is recognised in the Group’s high credit T2 DEBT RATINGS (S&P/M/F) BBB/Baa1 (hyb)/A+ ratings. NET STABLE-FUNDING RATIO 114% (30 Sep 18) LIQUIDITY-COVERAGE RATIO 133% (30 Sep 18) CET1/TOTAL REGULATORY CAPITAL RATIO 10.63%/14.74% (30 Sep 18) Funding strategy TOTAL SIZE OF ASSET BOOK/ A$879,592m/A$425,384m (30 Sep 18) Westpac’s wholesale-funding activities are focused on diversity RISK-WEIGHTED ASSETS and flexibility, with a view to providing the Group with a stable and efficiently priced wholesale funding base within the FUNDING METRICS (30 SEP 18) parameters of prudent liquidity management. In recent years, WHOLESALE FUNDING BREAKDOWN SHORT-TERM WHOLESALE 30% Westpac’s annual term-funding volume has been A$30-A$35 LONG-TERM WHOLESALE 70% billion equivalent, including capital. WEIGHTED-AVERAGE TERM-DEBT MATURITY1 4.2 yrs Diversity is a key part of the Group’s funding strategy. It TERM FUNDING BREAKDOWN is assessed from a number of different perspectives, including SENIOR 62% currency, product type and maturity term, as well as investor COVERED 21% type and geographical location. Westpac is a regular issuer of SECURITISATION 5% T1 5% public benchmark transactions in core currencies. The bank SUBORDINATED DEBT 3% also looks to meet specific investor demand through private- OTHER 4% placement issuance in a range of products and currencies. TOTAL OUSTANDING TERM-DEBT ISSUANCE BY CURRENCY Westpac is the only Australian bank with access to the US USD 40% SEC-registered market and the only Australian major bank AUD 30% with an active auto ABS capability. Non-AUD transactions are EUR 19% swapped back into Australian dollars. GBP 3% Westpac maintains a strong global borrowing profile JPY 2% through regular investor-relations activities, providing CHF 2% NZD 2% transparent and comprehensive information on the Group’s OTHER 2% credit, business and funding positions. The Group also puts 1. Only >1yr maturities; is on a residual-maturity basis. significant focus and internal due diligence into each public transaction, to ensure the deal structure, syndicate group, About Westpac Banking Corporation pricing, maturity and timing are appropriate for the market at estpac Banking Corporation (Westpac) has a launch, in order to set a base to underpin price performance in long and proud history as Australia’s first and the secondary market. oldest bank. For 200 years, Westpac has been Management and execution of the wholesale funding guided by the same purpose: to provide stability, strategy is the responsibility of Westpac’s treasury team. to support customers and communities, and to Whelp grow the economy. AUD activity Today, Westpac is Australia’s second-largest bank by market Westpac is a regular and significant issuer of Australian capitalisation and also one of the largest banking organisations dollar product, from NCDs to MTNs to capital securities. in New Zealand. Westpac is focused on its core markets of At 30 September 2018, approximately 30% of the Group’s Australia and New Zealand, providing a comprehensive range outstanding term debt was in AUD while 44% of the Group’s of financial products and services including consumer, business short-term portfolio was in AUD.
50|KANGANEWS/TD SECURITIES FINANCIAL INSTITUTION YEARBOOK DEC 18/JAN 1 9 FIRST ISSUE VOLUME MATURITY/ COUPON (%)/ COUPON ASSET DOC./ TERM DEBT MATURITY PROFILE (ALL CURRENCIES) DATE (A$M) CALL DATE MARGIN TYPE TYPE PROGRAMME
8 Mar 16 200 10 May 19 103/BBSW FRN Senior Domestic Covered bonds Senior unsecured/ T2 AT1 ABS/RMBS 28 Jan 16 200 25 Feb 19 97/BBSW FRN Senior Domestic 19 Jan 16 60 4 Jun 26 4.125 Fixed Senior Domestic 35 21 Dec 15 30 4 Jun 26 4.125 Fixed Senior Domestic 0.3 1.3 4 Dec 15 150 4 Jun 26 4.125 Fixed Senior Domestic 30 1.4 1.0 1.1 28 Oct 15 175 28 Oct 20 3.25 Fixed Senior Domestic 25 3.4 28 Oct 15 2,100 28 Oct 20 108/BBSW FRN Senior Domestic 3.5 28 Sep 15 36 28 Sep 20 2.82 Fixed Senior EMTN 20 3.0 18.8 19.6 1.2 17 Sep 15 30 17 Sep 25 4.00 Fixed Senior EMTN 25.1 1.2 15 Prospec- 08 Sep 15 1,324 22 Mar 21 400/BBSW FRN Hybrid 10.5 14.4 tus 10 15.2 28 Jul 15 200 28 Jul 20 3.50 Fixed Senior Domestic
VOLUME (A$BN EQUIV.) 0.4 5 28 Jul 15 2,700 28 Jul 20 90/BBSW FRN Senior Domestic 7.4 7.7 7.0 2.2 4.5 5.3 18 Jun 15 44 25 Jun 20 2.99 Fixed Senior Domestic 0.9 2.7 0 Covered 4 Jun 15 50 4 Jun 25 3.875 Fixed Covered FY19 FY20 FY21 FY22 FY23 FY24 FY25+ bond AT1 and T2 data is listed to call date. 24 Mar 15 69 24 Mar 20 2.73 Fixed Senior EMTN 11 Mar 15 350 11 Mar 22 4.50 Fixed T2 TDSUB OUTSTANDING AUD BONDS 22 Jan 15 325 22 Jan 20 3.25 Fixed Senior Domestic 22 Jan 15 2,450 22 Jan 20 90/BBSW FRN Senior Domestic FIRST ISSUE VOLUME MATURITY/ COUPON (%)/ COUPON ASSET DOC./ DATE (A$M) CALL DATE MARGIN TYPE TYPE PROGRAMME 30 Sep 14 56 25 Sep 19 3.64 Fixed Senior EMTN 06 Aug 14 100 20 Aug 21 4.375 Fixed Senior EMTN 4 Sep 18 50 4 Sep 26 3.25 Fixed Senior Domestic 2 Jul 14 100 6 Nov 19 4.00 Fixed Senior EMTN 8 Aug 18 30 8 Aug 33 4.04 Fixed Senior EMTN 23 Jun 14 1,311 23 Sep 22 305/BBSW FRN Hybrid Hybrid 31 Jul 18 128 2 Aug 22 2.58 Fixed Senior EMTN 9 Apr 14 25 19 Mar 21 5.00 Fixed Senior EMTN One time 22 Jun 18 725 22 Jun 23 3.735 T2 TDSUB call 19 Mar 14 100 19 Mar 21 5.00 Fixed Senior EMTN 17 Apr 18 425 27 Oct 22 86/BBSW FRN Senior Domestic 5 Mar 14 1,000 5 Mar 19 205/BBSW FRN T2 TDSUB 29 Mar 18 50 29 Jun 28 3.70 Fixed Senior Domestic 25 Feb 14 1,900 25 Feb 19 94/BBSW FRN Senior Domestic One time 25 Feb 14 1,100 25 Feb 19 4.50 Fixed Senior Domestic 13 Mar 18 1,690 13 Sep 25 5.135 Hybrid Prospectus call 24 Feb 14 54 20 Feb 19 4.14 Fixed Senior EMTN 6 Mar 18 2,350 6 Mar 23 83/BBSW FRN Senior Domestic 19 Feb 14 100 19 Feb 20 4.75 Fixed Senior EMTN 6 Mar 18 250 6 Mar 23 3.20 Fixed Senior Domestic Covered 31 Jan 14 225 21 Nov 23 5.25 Fixed Covered 5 Mar 18 130 2 Mar 48 5.00 Fixed T2 TDSUB bond 27 Feb 18 52 21 Feb 22 2.50 Fixed Senior EMTN 10 Dec 13 100 10 Dec 19 4.875 Fixed Senior EMTN Covered 27 Feb 18 117 27 Feb 23 2.85 Fixed Senior EMTN 21 Nov 13 900 21 Nov 23 5.25 Fixed Covered bond One-time 16 Feb 18 250 16 Feb 23 3.355 T2 TDSUB call 16 Apr 13 100 16 Apr 19 4.375 Fixed Senior EMTN 24 Jan 18 185 24 Jan 48 5.00 Fixed T2 TDSUB 11 Mar 13 20 11 Mar 20 4.816 Fixed Senior Domestic 28 Dec 17 20 28 Dec 22 70/BBSW FRN Senior EMTN 8 Mar 13 1,384 8 Mar 19 350/BBSW FRN Hybrid Prospectus Zero 22 Nov 17 150 28 Oct 20 55/BBSW FRN Senior Domestic 27 Feb 13 5 27 Feb 23 0 Senior Domestic coupon 30 Oct 17 300 27 Oct 22 3.125 Fixed Senior Domestic 11 Oct 11 40 11 Feb 20 7.25 Fixed Senior Domestic 30 Oct 17 1,950 27 Oct 22 81/BBSW FRN Senior Domestic 20 Jul 10 60 20 Jul 20 6.88 Fixed Senior EMTN 18 Sep 17 800 28 Oct 20 61/BBSW FRN Senior Domestic 25 Jun 10 35 25 Jun 20 7.245 Fixed Senior EMTN 29 Aug 17 83 25 Aug 22 2.70 Fixed Senior EMTN 24 Jun 10 25 24 Jun 20 7. 38 Fixed Senior EMTN 16 Aug 17 350 16 Aug 24 4.334 Fixed T2 EMTN 18 Jun 10 20 18 Jun 20 7. 38 Fixed Senior EMTN 25 Jul 17 53 22 Jul 21 2.42 Fixed Senior EMTN 16 Apr 10 110 11 Feb 20 7.25 Fixed Senior Domestic Covered 31 May 17 400 31 Aug 22 2.75 Fixed Covered bond 11 Feb 10 240 11 Feb 20 7.25 Fixed Senior Domestic Covered 31 May 17 1,600 31 Aug 22 76/BBSW FRN Covered Outstanding AUD bonds to 30 September 2018. bond Subordinated debt is listed to first call date. 7 Feb 17 2,350 7 Feb 22 111/BBSW FRN Senior Domestic SOURCE: WESTPAC BANKING CORPORATION OCTOBER 2018 7 Feb 17 250 7 Feb 22 3.50 Fixed Senior Domestic 16 Sep 16 75 4 Jun 26 4.125 Fixed Senior Domestic 28 Jul 16 300 3 Jun 21 114/BBSW FRN Senior Domestic 25 Jul 16 50 4 Jun 26 4.125 Fixed Senior Domestic 30 Jun 16 1,702 20 Dec 21 490/BBSW FRN Hybrid Prospectus 14 Jun 16 175 14 Jun 23 4.80 Fixed T2 TDSUB FOR FURTHER INFORMATION PLEASE CONTACT: 3 Jun 16 500 3 Jun 21 3.10 Fixed Senior Domestic Alex Bischoff 3 Jun 16 1,800 3 Jun 21 117/BBSW FRN Senior Domestic Executive Director Head of Global Funding 16 May 16 60 4 Jun 26 4.125 Fixed Senior Domestic [email protected] 14 Mar 16 64 11 Mar 21 2.80 Fixed Senior EMTN +61 2 8253 4314 10 Mar 16 700 10 Mar 21 310/BBSW FRN T2 TDSUB www.westpac.com.au/about-westpac/investor-centre/fixed- 8 Mar 16 2,150 10 May 19 103/BBSW FRN Senior Domestic income-investors
51 KangaNews events diary 2019 KangaNews runs the most comprehensive suite of events in the Australasian debt market, acclaimed by delegates for the quality of their agendas, speakers and attendees. Information on forthcoming KangaNews events is available at www.kanganews.com/events. Make sure to look out for the following in 2019:
13 FEBRUARY – SYDNEY AUGUST – AUCKLAND KangaNews Mutual Sector Wholesale KangaNews New Zealand Debt Capital Funding Seminar Markets Summit A new, half-day event promoting The biggest event for the whole New engagement between Australian mutual Zealand fixed-income community, featuring banks and wholesale capital, funding and insights from across the market and securitisation markets. beyond.
18 MARCH – SYDNEY 15 OCTOBER – SYDNEY KangaNews Sustainable Finance Summit KangaNews-Westpac Corporate Debt Australia’s leading conference for Summit sustainable capital markets, bringing Bringing together issuers and investors issuers and investors together to further in the Australian corporate debt universe, the dialogue on ESG financing. this is now the biggest domestic corporate fixed-income event. 19 MARCH – SYDNEY KangaNews Debt Capital Markets Summit NOVEMBER – AUCKLAND The unmissable event for the whole KangaNews-Westpac New Zealand Australian debt market, from government- Sustainable Debt Summit sector to high-yield issuers and domestic Introduced in 2018, this is the first and international investors. event bringing together the full range of stakeholders in the New Zealand AUGUST – SYDNEY sustainable-finance universe to promote KangaNews-NAB Fixed Income Beyond growth in the sector. the Institutional Sector Sharing insights from the fixed-income If you are interested in finding out more market with noninstitutional investors, and about any KangaNews event, including promoting the asset class to a new and sponsorship opportunities, please contact growing buyer base. Jeremy Masters: +61 2 8256 5577 or [email protected]
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