Normal 0 false false false MicrosoftInternetExplorer4 Investors rushed the first large volume local bond issue last week. Westpac launched a benchmark, five-year issue with an indicative price of 95 basis points over swap/bank bills.

On Friday, Westpac (rated AA-) priced A$1.9 billion and A$1.1 billion of fixed and floating rate notes at 94 bps over. This is the largest combined issue yet placed in the local market, aside from three covered bond issues made in the first quarter of 2012.

The domestic corporate bond market has got off to a very slow start this year, despite maturities of A$20.6 billion in the first two months. Clearly, there is pent-up demand among investors that issuers are yet to satisfy.

Goldman Sachs (rated A-) also tapped into this demand, selling A$700 million and A$250 million of five year, fixed and floating rate notes. The notes were priced at 130 bps over swap/bank bills, well inside the 170 bps Goldmans paid for five year funds last July.

Westpac New Zealand's arm also finalised a four-year bond issue on Friday, raising NZ$325 million at the top end of the indicated margin of 80-85 bps over the swaps rate. Westpac indicated on Monday it could raise a minimum of NZ$100 million and up to NZ$500 million in the issue, suggesting it was not as heavily bid as similar issues late last year.

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