AOFM Update Takeaways

The key takeaways from the AOFM's issuance update are as follows:

• "Treasury Bond issuance for 2020-21 is expected to be around A$240 billion," with ~49% of this already undertaken at this early stage of the calendar year. This has allowed the AOFM to slow its guidance re: weekly bond issuance to "around A$3-4 billion will be issued in most weeks" from "a rate of around A$4-5 billion in most weeks." As we have highlighted before, the strong run of recent syndications, which have seen record demand and issuance size, has allowed the AOFM to get well out in front of its pro-rata task.
• The Bond issuance guidance is roughly in line with sell-side expectations that were given in the wake of the hand down of the budget, if not a touch light vs. some expectations (granted, some look for the actual deficit to be wider than projected).
• No change in note issuance guidance.