World Bank to start selling kangaroo bonds

27 February 2012

Kangaroo bonds are to be sold for the first time since January 2011 by the World Bank's International Bank for Reconstruction and Development (IBRD).

The group is hoping to offload debt that will be due in 2017 and 2022 through a scheme that will be managed by Westpac, Australia & New Zealand Banking Group and TD Securities, Bloomberg reports.

As well as the IBRD, the European Investment Bank is also getting involved in the practice, which sees foreign entities sell bonds in Australian currency in the country's market.

Five-year kangaroo bonds to yield at 22 basis points will be available from the IBRD - which seeks to promote sustainable development through loans, guarantees and risk management products - while its ten-year offering will be marketed at a spread of about 33 points.

Last week, Westpac, the Commonwealth Bank and the National Australia Bank were all downgraded from AA to AA minus by credit rating agency Fitch.

By Claire Archer

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