Last week saw the Sydney branch of the Industrial & Commercial Bank of China (rated A) return to the local market with a A$650 million, three-year floating rate note issue. The notes were priced at 100 basis points over bank bills.ICBC has $400 million of July 2014 FRNs outstanding in the domestic market, and also has four other small, fixed-rate private placements outstanding. The latest maturity date is August 2017.In the hybrid sector, Westpac completed the bookbuild and pricing for its capital notes on Wednesday. The issue size was increased to A$1.25 billion and the coupon margin was set at the low end of the range, at 320bps over the 90-day bank bill rate.Offshore, ANZ (rated AA-) raised US$1.25 for three years, priced at 57 bps over US Treasury securities. The funds reportedly swapped back at 65 bps over swap rates.This is tighter than the 70 bps over swap that National Australia Bank paid for three-year funds in the domestic market the week before last.On Friday, in its quarterly Statement on Monetary Policy, the Reserve Bank of Australia commented that spreads on the major banks' unsecured and covered bonds had "fallen by 125 basis points since their most recent highs… on concerns regarding the sovereign debt situation in the euro area."The RBA noted that spreads on unsecured bank bonds "are now close to their lowest level since the start of the global financial crisis, and covered bond spreads are at their lowest level since the banks started issuing these types of bonds in November 2011."The RBA concluded that '"relative to the cash rate, banks' outstanding funding costs are estimated to have been broadly unchanged over the past three months.""It will take some time for the reduction in spreads to flow through to overall bank funding costs owing to the relatively subdued growth in credit and the slow run-off of wholesale debt issued previously at higher spreads."