Fitch has dealt an expected AAA rating to an inaugural move into covered bonds by both NAB and ANZ.

The bonds, made possible by government banking reforms, are seen by investors as lower-risk due to their dual recourse structure. The facilities have been touted as a sustainable funding source, and often carry a higher rating than their issuing agency. The moves by NAB and ANZ will be the first forays into covered bonds since they were given the greenlight under the reforms.

The government's bonds program will allow the banks to periodically issue bonds up to US $20bn, Fitch said. The bonds are backed by prime Australian residential mortgages.

"The launch of NAB's covered bond programme sees the commencement of what is expected to be an active source of additional funding for Australia's major banks," Fitch's Structured Finance team director David Carroll said.

The team's associate director, James Leung, said ANZ's launch, which quickly followed NAB's, was evidence of strong interest in the bonds as a new funding tool.