There are a few observations that can be made about last week's bond issuance by the banks. Firstly, the CBA has been the cleverest of all the issuers. It tapped three different market sectors and achieved a lower overall cost of funds as a result. Admittedly, the ANZ and Westpac raised more in three-year funding than the CBA, but the amount raised will cost them around 175 bps or more over swap, after paying for the government guarantee and swapping back into Australian dollars. The CBA paid 160 bps for three-year funds without a guarantee. This is also less than what nab paid for three-year funds, once nab adds on the 70 bps for the government guarantee, but nab is in front of the ANZ and Westpac. This highlights the advantage of tapping a domestic market that has been starved of issuance over the last three months.Similarly, the CBA raised only the equivalent of A$330 with its Japanese yen bond issue but this five-year funding will cost it around 105 bps over bank bills when brought back into Australian dollars. This compares well with the 120 bps paid for five-year funds in the local market.  Secondly, while underlying credit quality should not be a factor when bonds are government guaranteed, investors seem to have extracted a premium for Suncorp's and Macquarie's underlying A category credit ratings, relative to the big banks' AA category ratings. Suncorp paid only 20 bps less than the CBA for three-year funding but it was issuing with the support of a government guarantee. The Macquarie bond issue is hard to benchmark, as the US banks have been limited to three-year maturities under a US government guarantee, but at 60 bps over where ANZ and Westpac funded for three years, it seems clear that Macquarie has paid for more than an extra two years and a few extra dollars.To be fair, the timing of the issues last week was less than perfect. In the offshore markets, there have been massive volumes of government guaranteed bonds issued by other banks, so the Australian banks were lagging in that respect. Also running up to year end, investors are going to be more concerned about maintaining good levels of liquidity and ruling off their books rather than buying more bonds, although that doesn't seem to have hampered domestic investors too much.  Also the focus on the US s144A market for offshore issuance is questionable. It would have been interesting to see the Euromarket tested but perhaps the euro basis swap just wasn't going to work.Nevertheless, issuing government guaranteed bonds has proved to be very expensive.