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In an encouraging sign that credit market conditions are improving NAB has become the first big bank to sell bonds into offshore markets without the federal government’s guarantee.
The bank issued $1 billion in five year notes at 230 basis points over the London inter-bank offered rate (LIBOR), The Australian reported today.
While the pricing of the issue was expensive the issue was good news for a market that has been effectively closed since the collapse of Lehman Brothers last year.
"Our view was we had to put our toe in the water and tap this market again," a NAB spokesperson said.
The government introduced the wholesale funding guarantee in October last year, following the Lehman collapse, to ensure domestic banks were not locked out of offshore funding markets.
Last week budget papers revealed that the nation's banks – primarily the big four – had raised $104.1 billion in guaranteed debt since last October.
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