Australia’s major banks are known for their bond issues which are typically on the large side; only last week NAB issued $3.2 billion worth of fixed and floating rate bonds in two tranches. While such bond issues may be somewhat routine, they are still worthy of note given banks are at the heart of the financial web and their actions and bond pricing can provide a good insight into current global market trends.
Westpac’s latest 5 tranche issue certainly fits the bill. It continues the recent preference for USD transactions from corporates such as Amcor, Sydney Airport and BlueScope but of course it is substantially larger, totalling USD$4 billion (AUD$5.5 billion). The majority of the funds raised were via fixed-rate bonds with tenors of 3, 5 and 10 years, while only USD$500 million was raised in the two floating rate tranches.