AUCTION PREVIEW: The Australian........>

AUSSIE BONDS: AUCTION PREVIEW: The Australian Office of Financial Management

(AOFM) will today sell A$800mn of the 3.25% 21 Apr 2029 Bond, issue #TB138. The

line was last sold on 8 July 2019 for A$600mn. The sale drew an average yield of

1.3334%, at a high yield of 1.3350% and was covered 3.5083x. There were 31

bidders, 17 of which were successful and 8 were allocated in full. Amount

allotted at highest yield as percentage of amount bid at that yield was 38.0%.

- The line forms part of XMU9's underlying basket.

- The latest round of trade war escalation has seen the line's outright yield

extend to fresh historical lows. The line looks relatively cheap vs. longer

dated basket peers, but this is nothing out of the ordinary.

- The RBA's stance should provide some underlying support for the supply, but we

perhaps shouldn't expect the auction to be as well received as some of the

recent issuance in the sector (the last auction of this line wasn't particularly

well received either). Outright richness may present further issues, despite the

relative appeal, with some investors looking for longer duration in the sector.

- Results due at 0200BST/1100AEST.