Major Aussie banks switching from US money markets to longer-term bonds

Sydney

A WORSENING dislocation in the US money markets is helping to drive a run of jumbo dollar bond sales from Australia's major banks, as the likes of Westpac Banking Corp take advantage of attractive hedging costs to lock in low rates.

Due to a need to switch funding away from shrinking US money markets, the four biggest Australian lenders have sold US$30.1 billion of US dollar bonds so far in 2016, outpacing the US$25.5 billion raised in the whole of last year.

A rule change in the US money markets is pus…