ANZ, Westpac, NAB sell bonds to Aussie Cullen Fund

ANZ, Westpac, NAB sell bonds to Aussie Cullen Fund
ANZ, Westpac and National Australia Bank, which owns BNZ here, have sold bonds with maturities of up to 10 years to Australia's Future Fund as long term funding on international markets dries up and becomes much more expensive, the Australian newspaper has reported. The Australian government set up its Future Fund from the proceeds of a Telstra share sale and now has A$64.1 billion in assets under management. The fund was set up to meet future superannuation payments for Australian government employees and is often referred to in New Zealand as Australia's version of the Cullen fund, even though the New Zealand Superannuation fund will build up funds for all superannuitants. "Documents obtained by The Australian under Freedom of Information (FOI) laws show the ANZ, Westpac and the National Australia Bank obtained funding for as long as 10 years," The Australian said. "The FOI documents obtained by The Australian reveal that Westpac and the NAB have issued the Future Fund with notes with as long as a 10-year maturity, while a A$500million issue to the ANZ had a five-year maturity." The Australian government has also pledged to buy A$4 billion worth of AAA mortgage backed bonds from banks and non-bank lenders to provide extra cash and help reduce the banks' funding costs. The Reserve Bank of Australia is widely expected to cut the Official Cash Rate by 50 basis points to 6.5% later today, but the major banks are not expected to pass it all on because of higher funding costs on international markets. In recent days the Labor government there has said it would accept not all of the rate cut being passed.  

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