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

AUSSIE BONDS: AUCTION PREVIEW: The Australian Office of Financial Management
(AOFM) will today sell A$2.0bn of the 2.75% 21 November 2029 Bond, issue #TB154.
The line was last sold on January 13 2020 for A$800mn. The sale drew an average
yield of 1.2266%, at a high yield of 1.2275% and was covered 2.7500x. There were
34 bidders, 15 of which were successful and 5 were allocated in full. Amount
allotted at highest yield as percentage of amount bid at that yield was 75.7.7%.
- While the bond is still plenty liquid it hasn't been tapped for some time,
indeed this is the first tap of the line under the new market regime, so the
priors are somewhat useless re: comparative purposes. While the line currently
forms part of the underlying basked for XMM0 it could cheapen in coming months
as it moves towards losing its basket status and hedgability against 10-Year
futures diminishes. Indeed, the line already looks a little cheap on certain
measures, but the aforementioned reasoning may present headwinds to supply.
- The presence of a May '32 tender later in the week may also sap demand from
today's auction.
- Results due at 0200BST/1100AEST.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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