Oh what a funding

Toyota Finance Australia is a regular issuer of bonds in the domestic market and the finance arm of the automotive giant was last active in the local market in September of last year. However, this time the Netherlands branch of Toyota Finance has issued worth $99 million worth of Aussie-denominated March 2021s into the euro-bond market. Kangaroo bond issues, as they are known, typically pick up when the company can raise funding more cheaply by issuing in AUD and swapping the funds back into euros. Currency and interest rate markets sometimes produce pricing anomalies which are quickly exploited by banks and other participants, resulting in transactions such as this euro-bond issue.