Skip to main content
IDB launches inaugural "Kangaroo" bond issue for 675 million Australian, 5-year term

The Inter-American Development Bank today priced its inaugural "Kangaroo" bond issue of 675 million Australian dollars at 99.099 per cent, with a semiannual coupon set at 5.00% and a maturity date of Nov. 15, 2006.

The issue was priced to yield 47 basis points over the November 2006 Commonwealth government bond. The deal was originally contemplated for AUD200 million, but it was launched at AUD500 million and subsequently upsized to AUD675 dollars prior to pricing in response to surprisingly strong demand.

Commonwealth Bank of Australia and Deutsche Bank are the joint lead managers, and the co-manager group consists of ANZ, CSFB, Merrill Lynch International Australia, RBCDS, UBS Warburg, and Westpac.

This transaction is unique in Australian capital markets, as it is the first new benchmark issue launched by a supranational borrower after the Reserve Bank of Australia’s (RBA) announcement granting bonds issued by selected supranational entities eligible for collateral status for repurchase agreements in the RBA’s open market operations.

This status has paved the way for the IDB to target a new investor base, and the issue was sold primarily to domestic banks, offshore central banks and fund managers.

This was the Bank’s first bond issue under its domestic AUD5 billion Medium Term Note Program.

The proceeds of the issue will be used to help finance the social and economic development of the IDB’s Latin American and Caribbean member countries.

The issue is part of a funding program that is expected to raise between US$6-8 billion for the full year. Of the 2001 program, most of the needs are denominated in U.S. dollars, with small requirements for euro and Swiss franc funding.

Jump back to top