‌AUCTION‌ ‌PREVIEW:‌ ‌An Atypical Tap Of ACGB April‌ ‌'33‌

The Australian Office of Financial Management (AOFM) will today sell A$500mn of the 4.50% 21 April 2033 Bond, issue #TB140. The line was last sold on 24 February 2020 for A$400mn. The sale drew an average yield of 0.9832%, at a high yield of 0.9850% and was covered 4.1500x. There were 32 bidders, 11 of which were successful and 5 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 39.7%.

• This is an atypical round of issuance, with the line not tapped since February '20 i.e. before the post-COVID bond market regime came into play.
• The large coupon vs. surrounding lines prevents shorter duration, while the small size of the tap, the atypical nature of the auction and adjustments to the AOFM's issuance schedule over the coming week (flagged elsewhere) may point to dealers expressing interest via AOFM liaison.
• The above factors may support demand, although the recent steepening may keep some on the sidelines and prevent the auction from being as strong as it could be.
• Results due at 0000GMT/1100AEDT.