Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Matilda Bond

What it is:

Also known as a kangaroo bond, a Matilda bond is a bond issue in the Australian market by a non-Australian company.
 

How it works (Example):

Let's say Company XYZ is headquartered in San Diego. It specializes in research and products designed to preserve the Great Barrier Reef. It wants to open a center in Sydney, so it sells $10 million in bonds to build a factory. Because Company XYZ feels there will be considerable demand from Australian investors, it lists the bonds on the Australian market. These are Matilda bonds.

Why it Matters:

Matilda bonds may be issued by foreign parties, but they are subject to the securities regulations of Australia. Companies might issue kangaroo bonds to tap into interest in foreign markets, as was the case in our example, but they also might issue Matilda bonds to diversify their currency exposure (the bonds are denominated in Australian dollars).