Australia’s 2041 Bond Tap Issue Gets Over A$10B Orderbook

By Sophia Rodrigues

The Australian government's syndicated tap issue of 2.75% May 2041 Treasury Bond has received an orderbook of over A$10 billion in the first few hours of the launch.

The initial price guidance for the bond was a spread of 75.5bps to 78.5bps over the implied bid yield for the primary ten-year Treasury Bond futures contract. This has tightened to 75.5bps to 77.5bps.

The book will be priced on Tuesday and the Australian Office of Financial Management will issue up to A$6 billion of bonds.

National Australia Bank Limited, TD Securities, UBS AG, Australia Branch and Westpac Banking Corporation are Joint-Lead Managers for the issue.

The 2041 bond was first issued in July 2018 via syndication. At the time, the AOFM issued A$3.6 billion after receiving bid totalling A$7.66 billion at the clearing price. Offshore buyers took 45.2% of the issue. The spread was 42bps over 10-year futures.

A tap syndication of the bond was done in February this where A$2.0 billion was issued, out of A$6.1 billion of bids at clearing price. The spread was 49.5bps.