It appears that Bank of New Zealand is preparing to follow Westpac Securities NZ with a government guaranteed, US dollar denominated, bond issue. Reuters reported that the bank expected to issue US$750 million of three-year bonds priced at 75 bps over mid-swaps on Friday night.In the meantime, BNZ set the margin on its tier one hybrid capital raising at 409 bps over five-year swap and said it will cap the issue size at NZ$250 million. The issue had been launched the week before at a minimum NZ$150 million. The offer for the 'A+/A1' rated securities will close on June 23 and the securities will start trading on June 26. The securities can be called in June 2014 or the coupon rate will reset at that time.It seems that demand for the BNZ issue may have overshadowed demand for Rabobank Nederland's hybrid tier one PIE security issue, launched in mid-April. While initially launched at a minimum of NZ$200 million but subsequently capped at NZ$330 million, the Rabo issue closed at NZ$280 million. A margin of 375 bps over five year swap will be paid on the 'AA' rated securities.Issuance in the domestic market has gone fairly quiet over the last two months, despite the rush of retail issuance seen earlier in the year. The Rabobank issue is the first kauri for the year and takes year-to-date issuance to NZ$3.6 billion, according to our records. This appears to be down by 39 per cent on this time last year. Downer EDI, through its subsidiary Works Finance (NZ) Ltd (and rated 'BBB-' by Fitch) last week released the prospectus for a minimum NZ$100 million, three year, bond issue and said it would accept oversubscriptions to NZ$150 million. The bonds will pay a minimum coupon of 8.75 per cent but a spread of 450 bps to 500 bps over the three-year swap rate, to be set tomorrow, is being aimed for. The coupon will step-up by a further 125 bps should Downer EDI be downgraded by Fitch.The offer will open on Wednesday and close on June 24. Trading on the NZX listed bonds will commence on June 30.