Updated 20 December 2016
It should be noted that the issuance program is indicative only and the AOFM reserves the right to amend details for any reason.
The Treasury Bond issuance program for 2016-17 is effectively unchanged from the Budget program announced on 4 May 2016. Gross Treasury Bond issuance in 2016-17 is expected to be around $100 billion, most of which will be achieved via tenders. The increase from the Budget program is to facilitate buybacks of a range of outstanding short-dated Treasury Bonds. Buybacks were foreshadowed in the 4 May 2016 announcement but no issuance to fund them was included in that notice.
After accounting for maturities of $12 billion and buybacks of around $14 billion of Treasury Bonds maturing in future financial years this represents net issuance of $74 billion. Gross issuance to date this financial year totals $50 billion.
In addition to regular tenders, it is planned to establish new bond lines maturing in December 2021 and November 2028 via syndication in 2016-17.
As per established practice, details of the bond lines and amounts to be offered will be announced at noon on the preceding Friday.
Treasury Bond Buybacks
There are three ways in which the AOFM can repurchase Treasury Bonds prior to maturity: buyback tenders; in conjunction with syndicated issues; and from the RBA, which purchases short-dated AGS as part of its liquidity management operations.
The AOFM commenced buyback tenders in September 2016. Three tenders have been held, with a total of $1.3 billion of short-dated Treasury Bonds repurchased. Buyback tenders will continue to be held during most months. On these days, a tender for the issuance of the same volume of longer-dated Treasury Bonds will be held.
$6 billion of short-dated Treasury Bonds have been repurchased to date in 2016-17. It is expected that a total of around $14 billion of short-dated Treasury Bonds will be repurchased over the year.
Treasury Indexed Bonds
Issuance of Treasury Indexed Bonds (TIBs) in 2016-17 via tender is expected to be around $3 billion in face value terms. Issuance to date this financial year totals $1.4 billion. Two tenders for the issue of Treasury Indexed Bonds of at least $100 million each will be conducted in most months.
In addition to regular tenders, and subject to market conditions, consideration will be given to issuing a new TIB maturing in 2027, during calendar 2017.
Treasury Notes are a short-term discount security primarily used for within-year financing. The volume of Treasury Notes on issue varies depending on the flows of Australian Government receipts and expenditures.
Last updated: 20 December 2016