9 May 2012
Issuance of Commonwealth Government Securities
This notice provides details of planned issuance of Commonwealth Government Securities by the Australian Office of Financial Management (AOFM) on behalf of the Australian Government over the remainder of the current financial year (that is, the period to 30 June 2012) and during the 2012-13 financial year (1 July 2012 to 30 June 2013).
Treasury Bond issuance in the current financial year is expected to be around $58 billion (issuance to date is $50.2 billion). After accounting for maturities of $14 billion this represents net issuance of $44 billion.
Treasury Bond issuance in 2012-13 is expected to be around $35 billion. After accounting for maturities of $26 billion this represents net issuance of $9 billion.
In 2012-13 tenders will continue to be held on Wednesdays and Fridays, with details of the bond lines and amounts to be offered in a particular week announced at noon on the preceding Friday. The face value amount offered at each tender will usually be in the range $500 million to $1 billion.
It is planned to issue a new Treasury Bond line maturing in 2024 in the first quarter of the financial year. Issuance of this bond line will support the operation of the ten-year Treasury Bond futures contracts.
Later in the financial year it is planned to issue a new Treasury Bond line aimed at maintaining the length of the yield curve at around 15 years.
Treasury Indexed Bonds
Over the remainder of the current financial year, two tenders for the issue of Treasury Indexed Bonds are planned. It is planned to issue the September 2030 line this month and the February 2022 line in June. The face value amount offered at each tender will be in the range of $100 million to $150 million. This will mean that Treasury Indexed Bond issuance in the current financial year will be $2.1 to $2.2 billion.
Issuance of Treasury Indexed Bonds in 2012-13 is expected to be around $2 billion. Treasury Indexed Bonds will be issued by tender each month, except for December 2012 and January 2013. There are no plans to issue any new Treasury Indexed Bond lines in 2012-13.
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. It is planned to keep at least $10 billion of Treasury Notes on issue at all times so as to maintain a liquid market.
Aussie Infrastructure Bonds
Some of the proceeds from the issuance of Commonwealth Government Securities may be used to finance the Government’s investment in the National Broadband Network, which are then reported as Aussie Infrastructure Bonds in the budget papers.