Australia Debuts Bonds Tied to Alternative Gauge in Global Trend
- Comes as global markets move away from scandal-hit Libor
- Other state, financial issuers may follow suit: UBS’s Galt
This article is for subscribers only.
An Australian borrower priced floating-rate bonds that are linked to an alternative to the market’s benchmark rate for the first time, the latest in a global move away from scandal-damaged gauges including Libor.
The South Australian Government Financing Authority on Thursday priced the note over the Reserve Bank’s benchmark rate, known as Australian Interbank Overnight Cash Rate, or AONIA. That was instead of the market’s benchmark, the locally-set bank bill swap rate that’s commonly referred to as BBSW.