FEATURE
NEW ZEALAND SECURITISATION REVIEW AND PREVIEW New Zealand securitisation has continued its upward trajectory in 2019, according to Deemple Budhia, Simon O’Connell and Ling Yan Pang of the Australian Securitisation Forum (ASF)’s New Zealand subcommittee. While 2017 and, to a lesser extent, 2018 were post-financial-crisis record years for term issuance in New Zealand, 2019 has materially surpassed both of them.
deals in the year, the second of which set a record for recent transactions after being upsized to NZ$300 million. This edged out Motor Trade Finance’s NZ$280 million Rambler transaction. While all transactions were from repeat issuers, it has been pleasing to see a number of new investors, both domestic and offshore. In total, 18 investors participated across the six transactions, two of which were new to the New Zealand securitisation market. Of the total issuance, 55 per cent by volume was placed domestically, 43 per cent into Australia and the balance further afield. Bank balance sheets took 22 per cent of volume with the rest purchased by real-money accounts. Further enquiry has been received from investors that have previously not considered securitisation. This can be attributed largely to the product’s attractive risk-return profile and performance over the last 10 years, and the prospect of issuance of the Reserve Bank of New Zealand (RBNZ)’s residential mortgage obligation (RMO) securitised asset class in the near future. In response to increased enquiry, the ASF has run a number of courses. These have been well attended by a variety of market participants including issuers, investors and government agencies. Aside from capital-markets issuance, 2018-19 has seen a number of new warehouse facilities established by lenders in New Zealand and existing warehouses increased in size to a level that could permit bond issuance in the near future. New sponsors include Harmoney, Pepper, Bluestone, Prospa and CFML. All these new facilities bode well for the future publicissuance pipeline.
REGULATORY CHANGES
6 · Australian Securitisation Journal | Issue 17_2020
N EW ZEAL AN D SECURITISATION ISSUAN CE VOLUM E Eclipx
Flexigroup*
MTF
Resimac
Avanti
Latitude
1.600 1.400
200
1.200
250
1.000 VOLUME (NZ$M)
T
he 2019 record volume has coincided with the growth of nonbank lenders in the New Zealand market, including the return of some familiar names. Volume of issuance and number of issuers are clearly lower than Australia, but the six New Zealand transactions in 2019 – totalling NZ$1.4 billion (US$895.3 million) – marks a notable step forward. The 2019 outcome marks a significant improvement on issuance to 2018 and is close to the aggregate issuance of NZ$1.5 billion for 2017-18 combined (see chart). All six transactions this year came from returning issuers, though. Term issuance over recent years has been split almost equally between credit-card asset-backed securities (ABS), auto ABS and residential mortgage-backed securities (RMBS). This trend continued in 2019. It differs from Australia, where RMBS continues to be the dominant form of term issuance. By far the largest issuer in 2019 has been flexigroup, through its Q Card Trust. It is the only issuer to bring two
There have also been important regulatory changes and proposed changes, particularly for banks, over the past few
800 600 400 200 0
280
250 220 200 209 224 2017
*Two deals in each of 2017 and 2019. SOURCE: KANGANEWS 27 OCTOBER 2019
453
200 150 2018
250 2019 YTD
