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

AUSSIE BONDS
AUSSIE BONDS: AUCTION PREVIEW: The Australian Office of Financial Management
(AOFM) will today sell A$2.0bn of the 2.50% 21 May 2030 Bond, issue #TB155. The
line was last sold on 22 April 2020 for A$1.5bn. The sale drew an average yield
of 0.8460%, at a high yield of 0.8475% and was covered 4.2900x. There were 55
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 48.5%.
- The recent flattening of the 3-/10-Year curve back from steeps would, at face
value, point to the potential for a slight pullback in demand at the upcoming
auction. But we have of course seen a fresh round of fiscal/issuance projections
from the sell side on the back of the JobKeeper administrative error (A$60bn
worth) flagged by Treasury at the backend of last week.
- Demand at the auction should therefore hold up, given ample liquidity, reduced
fiscal burden and the recent run of strong of demand for paper in the 9-12 Year
bucket, as evidenced by the syndication of the nearby, new Dec '30 line.
- Results due at 0200BST/1100AEST.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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