The Australian Office of Financial.....>

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

sell A$600mln of the 2.75% 21 November 2028 Bonds, issue #TB152. The line was

last sold on 16 March 2018 for A$500mln. The sale drew an average yield of

2.7124%, a high yield of 2.7125% with 96.7% allotted at the high yield & was

covered 4.4620x. There were 34 bidders, 7 of which were successful & 1 was

allocated in full.

- The line has $A22.9bln outstanding with a modified duration of 9.08 years &

forms part of the underlying basket for 10-Year Bond futures which should

support demand, adding to a run of solid auctions for the line.

- In outright yield terms the bond is 15bp off the early Apr low, largely driven

by risk sentiment as opposed to domestic factors. RBC suggest that the line is

the "best 10-Year basket pick on RV metrics including zero & forward yield, but

it has been the most heavily issued 10-Year basket bond through FY17-18". 

- The domestic 3-/10-Year yield differential is around 12bp flatter than it was

at the most recent auction of the line, but has moved backed from the recent

flat of ~45bp, printed in early April. Results due at 0200BST/1100AEST.