Issuance of Australian Government Securities – MYEFO 2017-18

19 December 2017

The Australian Government has released updated economic and budget forecasts. This notice provides updated details of planned issuance and buybacks of Australian Government Securities by the Australian Office of Financial Management (AOFM) over the remainder of the current financial year (that is, the period to 30 June 2018).

In accordance with established practice, details of each week’s transactions will be announced at noon on the preceding Friday.

Treasury Bonds

Treasury Bond issuance in 2017-18 is now expected to total around $74 billion. This is a decrease of $6 billion from the volume expected at the time of the 2017-18 Budget. After accounting for maturities of $31 billion and buybacks of around $15 billion of Treasury Bonds maturing in future financial years, this represents net issuance of $28 billion.

Around $32 billion of Treasury Bonds will be issued during the remainder of 2017-18 ($42 billion have been issued to date). The bulk of the program will be achieved via tenders. The AOFM plans to issue a new November 2029 Treasury Bond line via syndication. Two syndicated tap issues of existing long-dated bond lines have been held to date in 2017-18; further syndicated tap issues are planned.

As previously foreshadowed, a new May 2041 bond line is planned to be issued in the first half of 2018-19. This is part of the AOFM’s commitment to support the operation of the 20 year Treasury Bond futures contract.

Treasury Bond Buybacks

The AOFM’s program of regular buybacks for Treasury Bonds shorter than those comprising the primary three year Treasury Bond futures contract basket will continue.

Two buyback tenders will be held during most months although market conditions may give rise to some variance in this frequency. Tenders will typically be held on a Monday. As per established practice, on these days a tender for the issuance of the same volume of longer-dated Treasury Bonds will usually be held.

$7 billion of short-dated Treasury Bonds maturing in future financial years have been repurchased to date in 2017-18. Around $15 billion are expected to be repurchased over the year. The final volume will vary depending on the quantity of Treasury Bonds offered to the AOFM in conjunction with syndicated issues, and purchases from the RBA.

Treasury Indexed Bonds

Around $5-6 billion of Treasury Indexed Bond (TIB) issuance is planned for 2017-18 (in face value terms). $4 billion of TIBs have been issued to date this financial year.

Two tenders for the issue of TIBs will continue to be conducted in most months.

Treasury Notes

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: 18 May 2018