For example, Coke, which is rated A-, was able to issue more than 100 basis points below the AAA rated domestic covered bond issues. 4  BIS central bankers’ speeches  The rise in wholesale funding costs has been accentuated for funds raised offshore by a widening in the cost of swapping foreign exchange into Australian dollars (Graph 4).
This is another example of European issues affecting the local market, as the widening is partly a function of the lower volume of Kangaroo issuance in recent months. The Kangaroo issuers seek to swap the $ funding they raise back into foreign currency, while the Australian banks do the reverse with their foreign currency raisings.