(Updates with Australian legislation in first paragraph.)
Nov. 11 (Bloomberg) -- Australia & New Zealand Banking Group Ltd. is said to be planning a sale of covered bonds after Australian lawmakers approved rules allowing domestic banks to sell the loan-backed securities.
The five-year, U.S. dollar-denominated note offering for the Melbourne-based bank is planned for next week, according to a banker with knowledge of the transaction, who declined to be identified because the information is private.
ANZ joins Commonwealth Bank of Australia, the nation’s biggest lender, and National Australia Bank Ltd. in planning sales of covered bonds as issuance surged to a record this year. The securities, a staple of European bank financing for more than 200 years, are backed by mortgages or public-sector loans and guaranteed by the issuer.
Australia’s Senate passed legislation in October to allow domestic lenders to sell covered bonds for the first time. While offshore banks have been allowed to sell the securities in Australia, the ban meant domestic lenders were unable to access the relatively cheaper funding available from covered bonds.
Sydney-based Commonwealth Bank of Australia arranged talks with covered bond investors in Europe and the U.S. that were expected to start on Nov. 7, and NAB in Melbourne organized bond investor meetings starting Oct. 31, according to people familiar with the arrangements.
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