Bank funding costs poised to end European crisis?

From Banking Day comes the news that on Friday:

…Westpac priced the Series 2013-1 WST Trust. The A$1.9 billion class A tranche, with a weighted average life of three years, was priced at 85 basis pointed over the one-month bank bill swap rate.

Pricing on the $71 million class B tranche and the $97 class C tranche was not disclosed.

Westpac launched the deal earlier in the week seeking $750 million, but it ended up issuing $2.1 billion.

These are pre-European crisis rates, though still well above pre-GFC rates. Checking in on the CDS market, which is an excellent proxy for long-term wholesale yields, on Friday prices hit their lowest levels since late 2010 and look likely to finally breach the European crisis floor of 100bps:

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.