Banks have dominated the issuance of new debt securities in the marketplace over the first half of 2007. In the investment grade and above category the $200 million “credit-wrapped” 10-year issue from Vector Limited in March was the only corporate name to appear. Westpac arranged the “AAA” rated issue with the credit insurance provided by Ambac Assurance Corp.

Bank issues that came to the market were:-

• ANZ National - $250m (A+) subordinated issue for 5 years at swap +0.26% in February, followed by another $300m (AA-) in June, this time for 5 years + 5 years at 0.12% over swap
• Kiwibank - $75m (A+) first ever issue to the wholesale market in February, also for a 5+5 year term at swap +0.30%
• Bank of America – A $325m (AA) “Kauri” bond issue in March for 5 years at swap + 0.18%
• HBOS (Halifax Bank of Scotland ) - $325m (AA) 3-years issue from the UK bank at swap +0.19%- fixed and floating tranches
• Rabobank – NZ branch issued $100m (AAA) 5 year term in April at a skinny swap +0.02%
• Morgan Stanley – Another Kauri bond from a US investment bank, $200m (A+), two tranches – 4 year floater at BKBM +0.26% and 7 year fixed rate at swap +0.43%
• BNZ – joined the 5 + 5 subordinated party in May with a $300m (AA) issue at swap +0.25%
• Auckland International Airport announced their intention in March to issue $200m of 7 & 10 year fixed rate bonds, arranged by the BNZ. They subsequently postponed the transaction because “market base interest rates increased”. AIAL must be one of the few companies still mixing the management of interest rate risk and funding risk together.