News & Events Debt Market

Australian Debt Market Update – April 2021

In the Australian debt market update published in April 2021, Barrington Treasury and Magma Capital provide an overview of bank funding, bonds and US Private Placements.

Loan Markets

Australian bank appetite for new loans has increased significantly since the start of 2021, with some of the larger banks now re-entering the market.  With the spread the largest it’s been over the past ten-year period, evidence indicates that a strong loan margin contraction should be expected based on the “jaws” between average BBB loan spreads and bank cost of funds.

Loan market volumes are down on previous years due to corporate deleveraging, absence of M&A and reluctance to fund new capital expenditure. New deals were largely constrained to rollovers within existing syndicates. Download the full report for details on selected recent Australian loans (Jan 2020 – March 2021).

Debt Capital Markets & recent issuances

Debt Capital Market growth in 2020 exceeded that of 2019 – supported by strong government issuances which made up 56% of total 2020 bonds issued in Australia.  The average weighted tenor was 11.0 years, up from an average 7.3 years on the period between 2015 -2020.

US Bond Issuances

Despite the COVID-19 global pandemic, corporate bond issuance grew overall in 2020.  For details on credit spreads, bond issuances and economic outlook, download the full report.

US Private Placement Issuances

US Private Placement activity (USPP) remains resilient and stable despite an extraordinary year across the globe. Volume in 2020 is estimated to be over US$90b after a strong second half increased transaction flow 25% from the first six months of the year.  Among the key USPP Australasian issuances since February 2020 were Perth and Sydney Airports, mining services Westrac Equipment and ALS Ltd, Vector and Ryman Healthcare. For details of key USPP Australasian issuances, download the full report.
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