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There's no FX risk for them because they are lending money to an Australian Bank in the investor's own local currency. The FX risk lies with the Bank.

Hedging is expensive, even for a large institution like NAB. The longer the term, the more expensive it is to hedge as well. So that is why borrowing overseas isn't always cheaper.

Maybe banking isn't in vogue right now?

Not sure if people here understand - but hedging is a very expensive exercise. Even for a 2-year forward on AUD/USD you'd be paying at least 7% above current spot rate, maybe even more. That means 3.5% extra each year has already been built into your pricing - which negates a lot of the benefit...

Actually BHP doesn't take the exchange rate risk because they report in USD anyway

Maybe. But I'm a net borrower of bank funds so....not too concerned :)

Because BHP is a AAA borrower akin to government debt. Their margin over money-market rates are always very low (1-2%) so not surprised at all.

Mr Buffett is a shrewd man indeed. He is not charitable in the slightest, despite his recent pledge of his fortune. He is, and always has been, a pure capitalist at heart.

And Shadow, what is your reasoning for the post-GFC boom in Melbourne (and Sydney)?