National Australia Bank would not say why it undertook a ₤500 million, five-year, bond issue last week. It could have been raising funds for its Clydesdale Bank subsidiary, which was recently downgraded by Moody's to 'A1', three notches below where Moody's rates NAB, or it could have been just testing the offshore market for non-government guaranteed bank issuance. Either way, NAB became the first of the big four to re-enter the offshore markets with a benchmark size, non-guaranteed bond issue and with a five-year term to maturity too.Nevertheless, NAB paid up for the privilege. The bonds were priced to yield 285 basis points over Gilts, which has been variously put at anywhere from 210 bps to 230 bps over UK mid-swaps. This would swap back into Aussie dollars somewhere in the range of 270 bps to 285 bps. There has been no five-year non-guaranteed issuance in the domestic market to compare these margins against but the last three-year deal was priced at 128 bps over swap.In other offshore issuance, NAB privately placed US$30 million for three years at Libor plus 109 bps and also arranged a three-year, US$20 million placement for the CBA but at Libor plus 114 bps. Both placements were not government guaranteed.Our records show that NAB subsidiary, BNZ International Funding, became the second New Zealand bank to issue in offshore markets with a New Zealand government guarantee, and not Westpac Securities NZ, which it pipped by a couple of days. BNZ raised Â¥15 billion for five years in the Euromarket and then a day later raised a further Â¥3.2 billion for three years at Libor plus 60 bps. These raisings for BNZ, of course, don't actually amount to very much, equating to around NZ$310 million in total. Westpac, on the other hand, raised US$1.5 billion or more than NZ$2.4 billion, in the US s144A market for three years at 123.5 bps over US Treasuries. This equates to 80 bps over US dollar mid-swaps and is considerably cheaper than the Libor plus 150 bps that ANZ National paid for three-year funds in the same market, in March.Staying in New Zealand and with BNZ, the bank launched a minimum NZ$150 million hybrid, Tier 1 capital raising last week, via BNZ Income Securities 2 Ltd. The perpetual, non-cumulative securities are being offered to institutional and retail investors and will be listed on the NZX. BNZ will accept oversubscriptions for the 'A+/A1' rated securities, which are being marketed with a margin of 400-425 bps over the five-year swap rate. The rate will be set tomorrow with the offer to close on June 23 and the securities to start trading on June 26. The securities can be called in June 2014 or the coupon rate will reset at that time.BNZ issued NZ$449 million of similar securities in March last year, at a margin of 220 bps over swap.   Also Downer EDI, rated 'BBB-' by Fitch, announced that its New Zealand subsidiary, Works Finance (NZ) Ltd., is considering a domestic three-year bond issue.