A Look At The AOFM Announcement Covering FY21/22 Issuance Matters

Ahead of the release of the AOFM's more detailed guidance on issuance plans for FY21/22 (scheduled for 12:00 Sydney time, 03:00 London) it is worth refreshing your memory re: a recent speech made by AOFM CEO Rob Nicholl, which underscored the AOFM's desire to enact "wider spread operational flexibility" in its issuance task.

• Namely, Nicholl stressed that the AOFM will take a "step back from the more prescriptive guidance we have given in the past. While we will continue the practice of announcing a planned gross issuance program at Budget for the year ahead, details about planned new maturities will now be announced in two stages: in early July; and again when issuance resumes in January after the Christmas break. Updates on planned gross issuance for the year will continue as per past practice at MYEFO and the following Budget. We will also refrain from providing expected weekly issuance rates to give more flexibility. We understand that these changes will require trust in how we exercise that flexibility but are confident that over time these changes will prove sensible."
• In terms of potential new issuance announcements the may become apparent come the end of today's release there should be three points of focus:
• The potential for a new ACGB in the 12-Year zone, which would likely be an ACGB maturing in the latter part of '33.
• The potential for a new ACGB maturing in '43. If such a move doesn't come in the current FY then issuance of a new ACGB maturing in '44 during the next FY is practically a foregone conclusion given the previous guidance.
• The potential for a new index-linked line, which would represent an "in-fill maturity around the 10‑year part of the curve is under consideration, given this would be consistent with past practice."