Challenges of Communication. AOFM Tender Doesn't Sell Fully
By Sophia Rodrigues
Published On 24 Oct 2019 , 07:08 AMChallenges of communication!
This morning a 3-mo Aussie T-note auction received lukewarm response --A$936m worth of bids for A$1.0b that was on offer. As a result A$64m was unsold. Another auction for A$500m 6-mo notes was oversubscribed and sold fully. It is the first time since 2000 (based on available data) notes were not fully sold (except tiny 1-2m). In case of bonds the only occasion since at least 1982 when it was not fully sold was 1994 when there was a shortfall of A$303m. Given such an admirable track record, it is no surprise that the AOFM was baffled this morning to see undersubscription for the 3-mo notes. A shortfall of A$64m is a fairly small amount but there was always a worry that some might interpret it as a default by the government because they didn’t get the intended amount from the tender. To quell those worries, the AOFM decided to be pre-emptive and add a line to the release to say the “result is in no way a default by the Commonwealth of Australia.” To me it seemed like an unnecessary addition, some thought it was stupid but how is AOFM to know what reaction this rare event will get. The AOFM appears to have taken a path of least regret. It could have backfired but hopefully it didn’t. Just goes to prove how challenging communication is!
LATEST SNIPPETS
RBA buys entire A$750m but yields rise vs Thu
The RBA has bought the entire A$750 million of government bonds it notified this morning, spreading the purchase amon...
Published on : 17 Apr 2020 , 12:00 AMAOFM to issue total A$11B of bonds, notes next week.
The AOFM has announced the following tenders next week, totaling A$6.0 billion of bonds and A$5.0 billion of notes. T...
Published on : 17 Apr 2020 , 12:08 PMRBA unexpectedly tapers bond-buying to A$750M
An unexpected further tapering in bond-buying by the RBA this week, with today's announcement to purchase A$750 m...
Published on : 17 Apr 2020 , 12:00 AMAustralia sells May 2032 bond at 0.9853% Weighted Avg Yld. Coverage 4.09 times
The AOFM has sold A$1.0 billion of 1.25% May 2032 government bond at a weighted average yield of 0.9853%. The co...
Published on : 17 Apr 2020 , 11:07 AMAustralia sells May 2032 bond at 0.9853% Weighted Avg Yld. Coverage 4.09 times
The AOFM has sold A$1.0 billion of 1.25% May 2032 government bond at a weighted average yield of 0.9853%. The co...
Published on : 17 Apr 2020 , 11:07 AMNo demand for USD at RBA's third repo auction
No demand for US dollars at the RBA's fourth repo auction. Overall too, there has been tiny demand for US dollars...
Published on : 17 Apr 2020 , 09:22 AMRBA buys A$810M of April 2025 govt bond
The RBA has bought the entire A$1.0 billion of government bonds it notified this morning, with 81% of the buying in t...
Published on : 16 Apr 2020 , 12:00 AMRBA tapers bond-buying further to A$1.0B
As expected, the RBA has reduced its bond-buying further today, notifying an amount of A$1.0 billion, compa...
Published on : 16 Apr 2020 , 12:42 PMAustralia New 2024 Allocation -- 17.3% to Hedge Funds, 31.5% to Bks-Trading
Despite declining nearly half of the bids at the clearing price, 17.3% of the new 0.25% November 2024 syndicated bond...
Published on : 16 Apr 2020 , 09:22 AMAustralia govt makes record for new 2024 bond issue
The Australian government has set a record for a new bond issue, printing A$13 billion of the new 0.25% Nov...
Published on : 15 Apr 2020 , 01:28 PM