ANZ National borrowing overseas again, but no rush yet

ANZ National has tested the commercial paper market in recent weeks with a couple of half billion dollar issues for three month terms and sees it beginning to open up slightly, although New Zealand's largest banking group said it was very liquid with NZ$9 billion of cash on hand and would not need to revisit the longer term foreign debt markets until early next year. Releasing its General Disclosure Statement (GDS) for the September quarter, ANZ National gave more detail on its funding strategy and on its decision this week to insist on 20% deposits for most new customers. "We've been testing the market and it seems to be opening up a little," ANZ National CEO Graham Hodges told a media briefing, referring to the issuance in recent weeks into the commercial paper market. Hodges said ANZ National had been in the fortunate or well managed position of not having to roll over big amounts of foreign debt since the market had closed in late September. "We actually had reasonably few maturities from mid September through until now. We've been in the very good or favourable position where we didn't have high levels of maturities," he said. "We're fairly flush with liquidity," said Hodges, adding that the NZ$8 billion of cash available at the end of September had since grown to NZ$9 billion. ANZ National was testing the longer term foreign debt markets nightly, but did not necessarily need to return in earnest to roll over maturities until the New Year. Relatively slow lending growth combined with continued growth in retail deposits would also make the task easier, ANZ National said, adding it would make a decision next year on whether to make government guaranteed or non-government guaranteed wholesale debt issues. It was possible the bank could issue both guaranteed and non-guaranteed issues. Much would depend on the market reaction and pricing to both types of issues, Hodges said. ANZ National had used the Reserve Bank's new Term Auction Facility this week for the first time as a testing exercise, Hodges said. * This article was first published yesterday in our daily subscription newsletter for the banking and finance industries. The email costs NZ$365 per annum and carries exclusive news and analysis for New Zealand banking and finance industry executives, regulators and investors. Sign up for a free trial here.