Issuance volume in the domestic corporate bond market in the month of October was the second largest of the year, coming in at A$11.9 billion. Maybe this set the scene for November's relatively quiet start - or maybe that was because of the running of the Melbourne Cup on Tuesday.

The highlight of the week in the debt capital markets was ANZ's tier two capital issue, which was launched without a desired volume being specified but came with a very juicy indicative credit spread of 270 basis points. This was well wide of comparable secondary market levels of 220 bps and a fair market value assessment of 240 bps.

The issue closed at a modest $600 million on Friday, with no change in the credit spread of 270 bps.

Aside from ANZ, the Sydney branch of Oversea-Chinese Banking Corporation (rated AA-) was the largest issuer of the week, raising $400 million for three years, priced at a margin of 86 bps over bank bills.

Melbourne Airports (rated A-) returned with its second issue of the year, raising $120 million for ten years, paying 174.75bps over swap. Melbourne Airports raised $250 million for seven years in September, and paid 137 bps over to get those bonds away.

The Australian branch of Rabobank (rated A+) sold $100 million of 10.5 year bonds priced at 133 bps over swap, and Province of Ontario (rated A+) added $40 million to its August 2025 line, taking the size of the line to $265 million. The tap was priced at 70 bps over swap.Offshore, Westpac (rated AA-) provided more evidence of ever widening credit spreads for the major banks.

The bank sold US$1 billion of five-year covered bonds in the US s144A market, priced at a spread of 80 bps to mid-swaps. National Australia Bank's credit research team said the funds raised would have swapped back into Australian dollars at 104 bps over swap and, based on the rule of thumb, that covered bonds price at 70 per cent to 75 per cent of the level of senior unsecured bonds puts the senior debt price for Westpac at 140 bps to 150 bps over.

With levels like these it is not surprising that ANZ had to pay a margin of 270 bps to sell its tier two capital notes.

In New Zealand, Auckland International Airport (rated A-) completed its second bond issue for the year, time raising NZ$100 million for seven years. The bonds were priced at 95 bps over swap and follow a NZ$75 million three-year issue in September.

LGFA (rated AA+) completed its latest bond tender, adding NZ$30 million to its March 2019 line, NZ$50 million to its April 2023 line and NZ$60 million to its April 2027 line.The new bonds were sold at average yields of 3.0757 per cent for the March 2019 line, 3.7331 per cent for the April 2023 line and 4.1483 per cent for the April 2027 line.