In a press release yesterday, ANZ advised it had launched only the second Basel III compliant Tier2 subordinated bond issue from a major bank for the year. The issue could well be priced today, but ANZ provided no guidance on the likely size of the issue or the credit spread it expected to pay.The major banks have been placing their Tier 2 subordinated debt issues in the wholesale corporate bond market since the beginning of 2014, although they had relied on retail investors to buy into such issues in 2013.Basel III compliant Tier 2 subordinated debt has been issued since the beginning of 2013 and, because it contains a non-viability equity conversion trigger, was initially considered unattractive by institutional fixed income investors. The wide credit spreads, however, offered to retail investors to buy the subordinated bonds soon attracted institutional investor attention and this, combined with various structures designed to deal with the problem of unwanted shares at the point of non-viability, has resulted in all issuance being into the wholesale market. This has been the pattern since the start of 2014.Bendigo and Adelaide Bank opened the wholesale market for Basel III compliant Tier 2 debt in January last year, with a A$300 million issue. It was followed in August by ME Bank with its own A$300 million issue.But Westpac was the first of the major banks to issue such bonds - doing so in March 2014, when it raised A$1.0 billion of Tier 2 capital. It paid 205 basis points over bank bills at the time. ANZ followed in June with an A$750 million issue, priced at 193 bps over; and CBA followed in October 2014 with a A$1.0 billion issue priced at 195 bps over. NAB waited until March 2015, when it joined in with its own A$1.1 billion issue, which priced at 185 bps over. Credit spreads for such subordinated debt were steadily contracting.Since then, there have been only two small issues of A$50 million from Heritage Bank in June, priced at 350 bps over, and a A$25 million issue from MyState Bank, priced at a whopping 500 bps over, in August.Based on the size of previous Tier 2 capital issues by the major banks, it seems likely that ANZ will issue around A$1.0 billion of subordinated bonds. As for the credit spread, it will be much wider than anything paid by the major banks to date.Credit spreads have moved wider in recent months and, based on the secondary market level for NAB's subordinated bonds callable in March 2020 of 217 bps, ANZ may well have to pay upwards of 230 bps to get its deal away.But this is considerably cheaper than going to the ASX-listed retail market where comparable issues with 2018 call dates are offering credits spreads of 250 bps. Subordinated bond issuance by the major banks into the ASX-listed market is unlikely to be seen anytime soon.