Australia

Details

  • Service: Advisory, Transactions & Restructuring, Corporate Finance, Transaction Services
  • Industry: Financial Services
  • Type: Business and industry issue
  • Date: 13/11/2013

Debt Market Quarterly Update

KPMG's Debt Market Update reviews debt market activity and provides insights into the latest trends and the implications for Australian companies.

David Heathcote

David Heathcote
Partner in Charge, Debt Advisory Services

+61 2 9335 7193

dheathcote@kpmg.com.au

Debt Market Quarterly Update: Q3 2013 

The third quarter of the 2013 calendar year saw an already favourable borrowing environment improve further. Official interest rates decreased to a record low of 2.50 percent, whilst banks continue to remain hungry for new business in a benign loan growth environment.
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At the same time, demand for credit contracted as businesses continue to be cautious with regard to investment decisions. This has contributed to further pressure on loan margins and created increased competitive tension in the loan markets.

The prospect of increased costs of derivatives resulting from regulatory changes has resulted in the Australian capital markets being even more attractive to domestic borrowers as evidenced by the recent influx of BBB rated issuance.

 

Key themes

  • Subdued loan growth creating increasing competition from lenders resulting in a positive environment for borrowers – however lack of business confidence limits activity and pipeline.
  • Bond market awakening, especially for BBB corporates.
  • Wesfarmers sale-and-lease back solution to capital management.
  • Hedging changes on the horizon and their potential impact on corporates.
 

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