posted on 06-06-2019

Matilda Bond

Updated August 5, 2020
Written By
Paul Tracy

What is a Matilda Bond?

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

How Does a Matilda Bond Work?

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 Does a Matilda Bond Matter?

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).