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 17 April 2020 for A$1.0bn. The sale drew an average yield

of 0.9853%, at a high yield of 0.9875% and was covered 4.0970x. There were 51

bidders, 9 of which were successful and 4 were allocated in full. Amount

allotted at highest yield as percentage of amount bid at that yield was 77.4%.

- The bond up for tender does not fall in the XMM0 basket.

- The large size of the tender may present slight headwinds for the auction, but

takedown should be aided by the recent curve steepening. Both in terms of the

traditional measure against 3s, but also in terms of the 10-/12-Year curve

(which presents attractive hedging opportunities via futures & repo funding).

- The line's ASW spread sits just shy of the recent peak, but is threatening to

push back into positive territory again.

- Results due at 0200GMT/1100AEST.