The Australian Office of Financial.....>

AUSSIE BONDS: The Australian Office of Financial Management (AOFM) will sell

A$500mln of 2.00% December 2021 bonds on Friday, issue #TB151, the issue is part

of the underlying basked for 3-Year future YMZ7.

- The line was last sold on November 24, the sale drew an average yield 2.0281%,

a high yield of 2.03%, covered 5.40x. There were 10 successful bids out of 36

total, 5 allocated in full.

- The line has A$16.5bln outstanding with a modified duration of 3.84 years. In

the grey market the issue last yields 2.053%

- Spreads have narrowed recently as curves have flattened globally, the AU/US

2-Year spread has dipped into negative territory while the equivalent 3-Year

spread is last at 0.47bp, the lowest level for 17 years. While the 3-/10-Year

spread has widened slightly in the latter part of this week after weak data saw

the curve bull steepen it still sits just off the lowest since October at 58bp.

- From a relative value perspective the issue is slightly rich on an ASW basis

but is near the top end of its 3-month range on a Z-Spread basis.

- Results are due at 0000GMT/1100AEDT