In the game of Monopoly there's nothing worse than going to jail. Thanks to a bizarre negative-pledge clause written in the mid-1980s, Westpac has suffered the capital markets' equivalent. For more than a decade, it has been locked away from the international bond markets. But not any more. The Australian bank received its get-out-of-jail-free card on August 26. Now, free to borrow without constraint, it is mustard-keen to enter the bond market.
The negative-pledge clause dated back to a 12-year bond issued in 1985. Attached to this deal was a clause that stated the bank could not do anything beyond the "ordinary course of banking business". No-one in the Westpac team thought very...
