Debt Capital Markets Heating Up

Last week was one of the busiest on record for New Zealand issuers in the debt markets, with six offers pricing over the course of the week. After a slow start this year, the record-breaking issuance levels are a positive indicator of the markets’ health.

The six transactions included a range of wholesale, retail, structured and sustainable bond issuances by New Zealand issuers across different sectors, raising over $1.65bn in total:

• Turners Automotive Group priced its inaugural term issuance of $100m asset-backed securities.
• Transpower and Toyota Finance each tapped the wholesale market with three year floating rate note offers of $200m and $150m, respectively.
• The New Zealand Local Government Funding Agency printed a $750m increase across two series, including more of its 2030 sustainable financing bonds.
• Precinct Properties’ offer of NZX-listed subordinated convertible notes pricing $150m across two series.
• Chorus launched and priced an inaugural offer of A$300m Australian medium term notes.

This is the largest number of deal pricings for New Zealand issuers in a single week, for at least the last five years (based on KangaNews data).

Chapman Tripp finance experts, including Luke Ford, Cathryn Barber, Jana Hitchcock, Jessica Elder and Tom van Schaik, acted on five of the six transactions mentioned above (for Turners Automotive Group, Transpower, Toyota Finance, Precinct Properties and Chorus).

Finance Partner, Luke Ford said, “These transactions support the continued growth and depth of New Zealand’s debt markets. Issuers are continuing to diversify their funding sources, looking to match structures and tenor to investor demand. We see a strong range of further issuances in the pipeline for the next 12 months.”

Debt capital markets are a common funding source for New Zealand businesses. As noted in our NZX/ASX Top 50 Funding Composition report earlier this year, among NZX50 firms, 47 had drawn bank debt and 15 had some form of debt outside of New Zealand, largely through AMTN notes, United States Private Placement and through term debt facilities in Australia.

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