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

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

(AOFM) will today sell A$2.5bn of the 1.25% 21 May 2032 Bond, issue #TB158. The

line was last sold on 22 January 2020 for A$3.5bn. The sale drew an average

yield of 1.2394%, at a high yield of 1.2450% and was covered 3.2906x. There were

154 bidders, 64 of which were successful and 46 were allocated in full. Amount

allotted at highest yield as percentage of amount bid at that yield was 43.4%.

- Large DV01 on offer today, representing A$2.940mn, as the AOFM looks to

capitalise on the strong opening tender of the line with its inaugural tap.

There may be a degree of "high issuance" expectation discount in the price of

the bond, as the AOFM will look to get the bond up to size quickly. Timing of

entry to the XM futures basket could be a key driver for the contract over the

more medium term.

- The line has backed away from richest levels, yield now sitting in the middle

of the range, when looking over the bond's very short life, last ~1.08%. The

line's ASW spread has pulled back from highs, to now operate at lows.

- Results due at 0000GMT/1100AEDT.