SYDNEY (Reuters) -Westpac Banking Group on Tuesday reopened Australia’s big banks bond-market taps for the first time in more than a year, with a $2.75 billion deal that also marked their first use of a non-USD Libor benchmark rate to price the debt. Investors gobbled up Westpac’s first issue of senior bonds since January last year, allowing the country’s second-largest lender to pay only 60 basis points over Treasuries for $1 billion in 10-year debt, a 25% discount to the 80 points it paid last year. A $300 million floating-rate bond tranche maturing in five years was priced at a 52 basis point spread over the Secured Overnight Financing Rate (SOFR) - the first time any of the “Big Four” Australian lenders had used the Libor replacement for their deals. Australia’s big banks are bursting with cash and had abandoned onshore and offshore senior markets since the Reserve Bank of Australia (RBA) introduced the Term Funding Facility (TFF) in March 2020, costing only 0.10%, to ensure access to liquidity at the height of the COVID-19 pandemic. “There’s been a long hiatus since we’ve seen the major banks access term funding markets given their access to the central banks’ TFF and the substantial uplift in deposits,” said Allan O’Sullivan, Westpac’s head of debt capital markets syndication. “It’s positive that investors are seeing a transaction from them on their screens again.” Citigroup, Bank of America, Morgan Stanley, RBC Capital Markets and Westpac managed the issue, which was priced in New York hours on Tuesday afternoon and also included $1.45 billion 5-year bonds paying 40 basis points over Treasuries, according to the managers. “A super-strong outcome by Westpac,” said Ian Campbell, Citigroup head of debt capital markets in Australia and New Zealand. “The trades shine even brighter given the all-time tight spreads.” The bond had “really encouraging support from global USD investors, many of whom had not had a chance to buy senior unsecured AA rated opco paper for over 14 months from the major Australian bank sector,” he added. Australia’s major banks have not yet deployed the massive A$200 billion ($155.2 billion) funding facility in full but it expires in June and repayments start in 2023. Australia and New Zealand Banking Group, the nation’s third-largest lender, is also expected to issue senior unsecured bonds in coming weeks. Libor (London Interbank Offered Rate) is being replaced with rates compiled by central banks after lenders were fined billions of dollars for trying to rig the reference rate for their own gain in 2012. SOFR is published by the New York Federal Reserve to use as a reference point for U.S. dollar derivative and debt transactions. Britain’s financial regulators in March called a formal halt to nearly all Libor rates from the end of this year, piling pressure on markets to quicken a switch in interest rates used in $260 trillion of contracts globally. In late 2019, Westpac"s largest peer Commonwealth Bank issued the country"s first public deal that did not use the local LIBOR-equivalent benchmark, the bank bill swap (BBSW) rate. [reut.rs/2Tbo2gF] ($1 = 1.2890 Australian dollars) Reporting by Paulina Duran in Sydney; Additional reporting by Scott Murdoch; Editing by Stephen Coates Our Standards: The Thomson Reuters Trust Principles.