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Major raises unguaranteed funds

Staff Reporter 3 minute read

ANZ has raised $1.8 billion, the largest non-guaranteed bank funding deal in the domestic market this year.

The deal, which was three times larger than the initial $500 million target, has a four year maturity.

Market sources said the deal is a positive sign for the industry as it suggests there is a healthy appetite for unguaranteed money.

Last week the federal government announced it would withdraw its $190 billion wholesale funding guarantee from the market on 31 March 2010.

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But despite the banking sector's ability to raise unguaranteed funds, Macquarie Securities banks analyst Tom Quarmby said the decision to remove the guarantee could hurt the economy.

“The removal of the guarantee combined with the continued reliance on overseas wholesale markets, could present a significant risk for the banking sector if the rating agencies incorporated a stricter measure of liquidity and stable funding,” Mr Quarmby told The Australian Financial Review.

Major raises unguaranteed funds
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