The Australian Office of Financial.....>

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

sell A$400mln of 2.75% Nov 21 2027 bonds, issue #TB148.

- The line was last sold on 10 November 2017 for A$900mln. The sale drew an

average yield of 2.6201%, a high yield of 2.6225% with 14% allotted at the high

yield, covered 3.4556x. There were 40 bidders, 18 of which were successful and 4

were allocated in full.

- The 3-/10-Year spread has widened since the line was last auctioned and sits

at circa 75bp, compared to the 55-60bp seen at the prior auction.

- The issue has A$27.2bln outstanding with a modified duration of 8.43 years.

- Strong 10-Year demand & a lack of recent issuance in the sector are likely to

have a favourable impact on the auction. The bond also forms part of the

deliverable basket for 10-Year futures which should support demand.

- However, the relative value backdrop is less than enticing as the line looks

expensive on a z-spread basis.

- Results due at 0000GMT/1100AEDT.