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Global markets ground to a halt in the wake of President Trump’s Liberation Day tariff announcements on 2 April. However, we are now seeing encouraging signs of life in the debt markets as existing bonds continue to mature and treasurers consider their funding requirements.
New Zealand
New Zealand’s debt capital markets have experienced a notable uptick in activity in recent weeks as markets have stabilised. Since mid-May, there have been eight debt market issuances in New Zealand, alongside regular Government and LGFA tenders.
- The week of 12 May provided a particularly busy start for corporate offers, with Summerset, Christchurch City Holdings, and Toyota Finance returning to the retail or wholesale markets. They faced strong demand and issued $300m of bonds in aggregate.
- Following this, Chorus made its debut with $170m capital notes and Infratil issued $122.6m in new bonds and an exchange offer.
- Most recently, last week saw successful bank offers with wholesale floating rate note offers from both Kiwibank ($500m) and Rabobank ($425m).
- Providing further investment diversity, UDC has come to market with the first securitisation term out since Liberation Day, issuing $600m backed by auto finance receivables and equipment-backed commercial receivables.
Chapman Tripp advised on six of these eight issuances (for Christchurch City Holdings, Toyota Finance, Chorus, Kiwibank, Rabobank, and the arrangers to UDC’s securitisation and the recently announced $250m Avanti Finance RMBS mandate), as well as on the two New Zealand corporate bonds issued earlier in the year by PFI and Wellington Airport. The various teams were led by Luke Ford, Emma Sutcliffe, Fiona Bennett and Gerard Souness.
Access to offshore markets
Following a sustained period of record-breaking issuance that extended into early 2025, Australia experienced a slowdown in activity leading up to Liberation Day. However, the market re-opened in mid-April following an issuance from Sydney Airport. Since then, there have been several government and corporate issuances in Australia, including from New Zealand issuers Contact Energy and Fonterra.
Further afield, New Zealand bank issuers have begun accessing Northern Hemisphere markets again, with activity in both senior-unsecured and covered bond formats taking advantage of changing market conditions. Chapman Tripp assists on a range of issuances into the Asian, European and US 144A markets.
Looking ahead
We expect more issuers to return to the market in the coming weeks, subject always to further developments in US policy and other geopolitical factors. The Australian market remains an attractive option for rated issuers, particularly as New Zealand Government Bond issuance remains high locally, potentially limiting the supply of non-government highly rated issuance in New Zealand.
We also anticipate that the Reserve Bank’s easing cycle will continue to incentivise investors to lock in relatively higher rates while they can, particularly in higher-yielding products. Investors in
Australian bank AT1 instruments (now effectively retired as an investment category) will also be looking to shift funds into other higher-yielding deals (especially bank Tier 2 instruments, hybrids and other subordinated debt), providing opportunities for some bank and corporate issuers. However, New Zealand’s own Reserve Bank capital review is likely to limit bank regulatory capital issuance in the near term, as everyone waits to see if (and how) the minimum requirements and product types may change.
