The first quarter of 2020 saw a significant disruption and volatility in debt markets due to the devastating global health impact of COVID-19 and its subsequent economic shocks on a global scale. The increasing uncertainty as a result has caused a change in the funding landscape as both Federal and State Governments implement various policies to help contain the spread and impacts of COVID-19.
Market conditions – increasing uncertainty as a result of COVID-19 caused a significant widening of credit spreads.
Policy responses – a number of monetary and fiscal stimulus policies were announced by the RBA.
Policy impact on markets – a significant increase in trading volume across credit markets leading up to an increase in government bond yields during March.
Australian domestic bank debt market – Australian syndicated loan volume decreased significantly as the uncertainty surrounding COVID-19 and its political economic impacts peaked.
Australian domestic bond market – sharp rise in the cost of debt and implied spreads across investment grade credit at the 5-year tenor widened significantly.
USPP – not immune from the economic uncertainty and total placement volume fell by 35.3 percent year-on-year.
Notable syndicated transactions for the quarter included:
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