A kangaroo bond is a type of foreign bond issued in the Australian market by non-Australian firms and is denominated in Australian currency. The bond is subject to the securities regulations of Australia. A kangaroo bond is also known as a matilda bond.
Bond issuers that want access to investors and lenders in the Australian debt market would issue a bond referred to as a kangaroo bond, named in recognition of the country’s national animal emblem. A kangaroo bond is a foreign bond issued in Australian dollars by non-domestic entities, including corporations, financial institutions, and governments.
Simply put, a foreign bond is issued in a domestic market by a foreign issuer in the currency of the domestic country. Foreign bonds are mainly used to provide issuers with access to another capital market outside of their own to raise capital.
Major corporations and/or investment firms looking to diversify their holdings and improve their overall currency exposures can use kangaroo bonds to raise funds in Australian dollars. Kangaroo bonds are typically issued when interest rates in Australia are low relative to the foreign corporation's domestic rates, thus, lowering the foreign issuer's overall interest expense and cost of borrowing.

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