Australia to Sell Upto A$15B of New 2051 Bond as Orderbook Surges

By Sophia Rodrigues

The Australian government is likely to sell up to $15 billion of the new 1.75% June 2051 bond following a surge in orderbook overnight, resulting in the price being set at the lowest end of the 98bps to 102bps revised guidance.

The orderbook has topped A$35.75 billion by 0845 hours Tuesday Sydney time, and the book is set to close at 0930 hours.

The price guidance of 98bps over the implied bid yield for the primary ten-year Treasury Bond futures contract works out to a yield of 1.91%.

The deal size is expected to be at least A$12 billion and as high as A$15 billion.

The Australian Office of Financial Management will decide on the issue size later  Tuesday. The issue will settle on August 5.

ANZ, Commonwealth Bank of Australia, Deutsche Bank, J.P. Morgan Securities Australia Limited and UBS AG, Australia Branch are Joint-Lead Managers for the issue.

The Australian Office of Financial Management said there will be no further issuance of this Treasury Bond prior to November 2020 and it will mindful of the performance of the bond when considering the timing of future issuance.