Australia: After the gold rush
Money from pension funds is fuelling a boom in corporate bond issuance. But long-dated bonds and equities are lagging. Hans van Leeuwen reports
Australian domestic bond issues 1999 Month Issuer Amount (A$m) Credit rating Jan GMAC 50 A Jan AMP Bank 200 AA/A2 Jan Suncorp Metway 250 A- Jan Newcourt 75 BBB Feb CommonwealthBank 185 + 115 A+ Feb Case Credit 125 + 50 A Feb ANZ 300 AA- Feb Westpac (sub) 215 + 85 A+ Mar Schroders Property Fund 100 A- Mar St George 300 A Mar Ford Credit 100 A Mar Sydney AirportCorp 400 A+ Mar National Australia Bank 350 AA In the gold rush of 19th-century Australia, it seemed as if the country was made of money: one person squatting by a river would pan some gold and within weeks an industry of prospectors had set up camp. The 1999 corporate bond market in Australia has some similarities: as if from nowhere a thriving capital market has arisen and every week a pioneering issue is made that others quickly follow.
March's A$3.6 billion ($2.3 billion) of corporate-bond issuance was a record. The volume of issuance so far this year is greater than the entire year's in either 1998 or 1997. In April came the rare spectacle of foreign issuers roadshowing, and an influx of triple-B paper, both highly unusual in the Australian market.