Are NZ debt-market lawyers better off than their Australian counterparts?

Here’s what Australia can learn from its neighbour, according to a top corporate and finance lawyer

Are NZ debt-market lawyers better off than their Australian counterparts?

Australia could learn a thing or two from New Zealand, particularly on how to foster a robust retail bonds market.

“New Zealand has been cited for a long time as being ahead of the curve compared to Australia when it comes to the development of the bond market, particularly the retail bond market,” said James Hutton, MinterEllison partner.

He said that Australia’s trans-Tasman neighbour has what some would call better investor education, and in some cases a more facilitative regulatory regime.

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“In New Zealand, they’ve always had a bit of a love affair with the bond market, seeing a diversified portfolio of equities and bonds,” Hutton said. “In Australia, we’re catching up but, particularly on the regulatory side, New Zealand has taken some extra steps over the years to facilitate retail bonds and Australia still has still to go down that path.”

The lawyer, who’s part of the firm’s corporate and finance practices, said that the Australia bonds story is very much one of a work in progress. He said that work needs to be done in the corporate bond sector.

“We have a very successful Australian bond market both in the government sector and the banking bond sector,” he said. “We’re far more in the development phase in terms of the corporate bond sector. The bond market is deepening, gradually.  A little bit slowly, according to many who commentate in the industry, but it is deepening.”

Hutton said that some new developments in the Australian bonds market are, in fact, world firsts. Recently, Monash University became the first educational institution to offer a green climate bond, he said. The university raised $200m, which will go to its green infrastructure projects worldwide, and had bids for over $900m, Hutton said. National Australia Bank also recently issued the first gender equality bond, raising $500m to on-lend to organisations that meet World Gender Equality Board criteria, he said.


Hutton said that the pricing of bonds have gone higher and higher over the last two to three decades. With the flood of cheap financing, yields have come down and central banks are saying that the time for quantitative easing is coming to an end, he said. This means money could flow out of the bonds market.

However, he said that the level of issuances in the bonds markets will generally continue to trend upwards. If money will flow out of the bonds market, it would likely lessen trading of bonds more.

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