Nederlandse Waterschapsbank, a public sector finance agency, has entered a foreign exchange swap to convert the proceeds of a recent Australian dollar-denominated bond into euros. Tom Meuwissen, head of treasury, said the bank always exchanges foreign currency issues into euros, to alleviate currency exposure.
Meuwissen said the agency's funding rate varies according to the maturity of the bond, but is normally between 4 and 40 basis points under LIBOR. It issued this bond to take advantage of all-in-funding rates in Australian dollars versus the euro. He declined to specify what all in funding rate it achieved through this issue.
Demand for Aussie dollar issues has been fairly solid over the last two to three weeks, said Joseph Azzam, managing director and head of fixed-income origination and syndication at TD Securities, in London, the firm that led the bond deal and executed the swap. Swiss retail investors have been especially keen to buy Aussie dollar-denominated assets, but it also popular in the Benelux and Italy, he noted.
