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

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

(AOFM) will today sell A$2.0bn of the 3.25% 21 April 2029 Bond, issue #TB138.

The line was last sold on 4 December 2019 for A$800mn. The sale drew an average

yield of 1.0867%, at a high yield of 1.0900% and was covered 2.7062x. There were

37 bidders, 21 of which were successful and 13 were allocated in full. Amount

allotted at highest yield as percentage of amount bid at that yield was 42.9%.

- The line forms part of the XMU0 basket. The lack of recent taps has left

several analysts questioning why now? Could there have been some indications of

demand through dealer liaison? Desks seem to think not. Nonetheless, the line

will be tapped against a trend of slightly softer, albeit still healthy, demand

dynamics at recent ACGB auctions. The line's outright yield has moved away from

immediate recent outright richest levels, but the current yield levels combined

with the recent re-tightening of the AU/U.S. 10-Year yield spread may result in

some headwinds for supply. Still the plentiful liquidity backdrop should

ultimately mean the auction passes without too much trouble.

- Results due at 0200BST/1100AEST.