The lender, based in Ottawa, is joining other AAA rated borrowers including the European Investment Bank and the World Bank in seeking to tap demand for kangaroo notes, or debt sold in Australia in the local currency by offshore entities. EDC sold A$650 million of five-year kangaroo bonds, pricing the notes to yield 70 basis points more than similar-maturity government debt, according to an e-mailed statement from Commonwealth Bank of Australia, which helped manage the sale. Australia?s banking regulator, the Australian Prudential Regulation Authority, said in a paper last year it may allow some securities other than Australian sovereign bonds to qualify as liquid assets because there isn?t enough domestic government debt on issue to satisfy requirements. Kangaroo bonds may be a possible source of high quality liquid assets to help lenders meet tougher rules relating to the size and type of buffer they must hold to protect depositors, Kevin Davis, a professor of finance at the University of Melbourne, said in a March 15 report. read more

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