The Australian Office of Financial.....>

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

sell A$800mln of the 2.25% 21 May 2028, issue #TB149.

- The line was last sold on 14 February for A$600mln. The sale drew an average

yield of 2.8612%, a high yield of 2.8625% with 64% allotted at the high yield

and was covered 3.6617x. There were 42 bidders, 14 of which were successful and

8 were allocated in full.

- The line has A$24.5bln outstanding with a modified duration of 8.94 years.

- The AU/US 10-Year yield spread has continued to operate in negative territory

in recent weeks, although this has had no notable negative impact on auctions.

- The line forms part of the deliverable bond basket for 10-Year Bond futures

which should support demand. The May '28 has tightened against the Nov '27 in

recent weeks, and is now viewed as the "de-facto" 10-Year benchmark, although

both of the lines look expensive on a forward yield basis.

- It is worth noting that the AOFM will repurchase A$800mln across the 5.25% 15

March 2019 and 4.50% 15 April 2020 bonds at the same time.

- Results due at 0000GMT/1100AEDT.