Huge interest in Australia's inaugural 30-year government bond

Huge interest in Australia's inaugural 30-year government bond
Huge interest in Australia's inaugural 30-year government bond

Strong interest has emerged overnight in Australia's first-ever 30-year bond.

Demand has pushed past the $13 billion mark, although the size of the offer is likely to be less.

The new bond, which matures 21 March 2047, was launched on Tuesday.

It is expected to be finalised today by the Australian Office of Financial Management. 

Traders told the Australian Financial Review the demand is likely to have come from insurance companies eyeing globally attractive long-term rates paid by a triple-A rated borrower, and short-term traders and funds looking to buy securities that will gain in value if a slowdown in China forces further Reserve Bank of Australia rate cuts.

As of late Tuesday, the AOFM had almost $11 billion of orders and was guiding towards a yield of 3.24 per cent. 

The Australian Office of Financial Management said the historic transaction would be of 'benchmark' size'. 

Traders had anticipated 100 to 107 basis points over the implied yield of the 10-year bond futures contract.  

ANZ, Citi, Commonwealth Bank, Deutsche Bank, UBS and Westpac managed the issue.

Tags: 
Bond Bond Yields

Comments

Be the first one to comment on this article
What would you like to say about this project?