The Australian Office of Financial.....>

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

sell A$500mln 3.25% 21 April '29 Bonds, issue #TB138. The line was last sold on

09 March 2018 for A$500mln. The sale drew an average yield of 2.8212%, a high

yield of 2.8225% with 30.5% allotted at the high yield and was covered 4.3580x.

There were 36 bidders, 15 of which were successful and 7 were allocated in full.

- The line has $A20.7bln outstanding with a modified duration of 9.20 years.

- The line has entered the underlying basket for 10-Year bond futures which

should support demand.

- The Nov '28 looks more attractive in carry & roll terms, although carry and

role has been eroded by the flatter curve structure, while benchmark 10-Year

yields are nearly 20bp cheaper than the last time the bond was auctioned. RBC

suggests that the line "looks a touch rich to surrounding bonds, and we favour

selling them in favour of the May28s/Nov-29s."

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

last sits at a discount of ~17bp.

- Results due at 0100BST/1100AEDT.