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Author: Admin | 2025-04-28
By the ability to obtain well-priced long-term funding to match its long-lived assets. The total pool of US dollar bond issues by Australian banks and corporates is up to US$350 billion.Australian companies make use of the US debt market to raise funds both to finance their overseas operations and to make use of lower transaction costs in the US market, with funds raised in US dollars swapped back into Australian currency.Australian companies also access the US private placement market for long-term funding out to 40 years sourced from individual investment funds, often with less onerous documentation than would be required in Australia. Australian banks and major corporates carry good credit ratings and are well regarded in US markets.There is also active interest by US investors in Australian fixed-income markets following the financial crisis. IMF figures show Australia accounts for a surprisingly high 4.8 per cent of US investment in global fixed-interest securities.22 There was a step-change in US holdings of Australian debt securities following the financial crisis. Having hovered around $110 billion in the preceding years, it rose to $310 billion by 2014. The US accounts for 28 per cent of foreign investment in Australia’s bonds. US companies also make use of Australian dollars to raise funds. Although Australian markets are small relative to the vast pools of capital available in the United States, US businesses make issues in Australian dollars both to fund Australian operations and to exploit arbitrage opportunities in swap markets to gain favourable rates. Use of the Australian dollar market can be advantageous for tax reasons for foreign companies with Australian operations.Of Australian dollar non-financial corporate bonds outstanding of about $60 billion, approximately 40 per cent are foreign issuers, with US names including Apple, Verizon, McDonald's and Coca Cola.Figure 9. ASX-listed companies with US revenue, February
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