Sydney Airports to test investors with A$ bond swap

b (For the latest Australia and New Zealand bond news, double
click on [AU/CRD] and then double click on the ID number) 
SYDNEY, May 3 (Reuters) - Sydney Airports, Australia's largest
airport, will be meeting with investors this week to gauge
interest on a possible bond exchange, an investor who has been
invited said on Monday.
 The potential exchange would involve a buyback of two
AMBAC-credit wrapped note issues of A$400 million ($370
million) due in November 2011 and/or A$280 million due in
October 2012.
 Investors will be asked to give feedback on a new unwrapped
longer-dated bond issue.
 Westpac Institutional Bank is arranging the meetings.
 Sydney Airports is owned by Macquarie Airports MAP.AX, an
infrastructure fund in which Australia's top investment bank
Macquarie Bank MQG.AX owns a 23 percent stake.
 Wrapped bonds are backed by financial guarantees that used
to offer investors greater security. However, most global bond
insurers were hit hard by structured finance losses when the
global credit crisis hit and lost their triple A ratings.
 The Australian bond market has about A$20 billion in
outstanding wrapped bonds, most of them issued to fund
infrastructure projects.
 Such bonds were largely insured by MBIA Inc MBI.N and
Ambac ABK.N with the balance mainly split between XL Capital
XL.N, now Syncora Guarantee, Financial Security Assurance
Inc, now part of Assured Guaranty Ltd AGO.N and Financial
Guaranty Insurance Corp, according to ADCM data.
 (Reporting by Cecile Lefort)