Kangaroo Sales Dry Up as Regulator Bars Bonds: Australia Credit
This article is for subscribers only.
Sales of bonds by top-rated overseas borrowers in Australia have evaporated following a record start to 2011 after the nation’s banking regulator ruled they don’t qualify under new international capital rules.
The World Bank, Germany’s Kreditanstalt fuer Wiederaufbau and other supranational and agency issuers have avoided the kangaroo bond market since the Australian Prudential Regulation Authority said Feb. 28 their notes can’t be considered liquid assets under Basel Committee on Banking Supervision rules. The AAA rated securities represented 27 percent of new bond sales in Australia in 2010, according to data compiled by Bloomberg.