Arrangements for the Recommencement of Treasury Note Issuance

26 February 2009

In Operational Notice No 1/2009 of 4 February 2009 it was foreshadowed that issuance of Treasury Notes would recommence shortly.

The first issue of Treasury Notes is planned for 5 March 2009.

As was the practice when Treasury Notes were last issued in 2003, Treasury Notes will be offered for sale via tender.  Tenders will be conducted using the AOFM Tender System which is accessed via the Yieldbroker DEBTS System (see Operational Notice No 4/2009 of 23 February 2009).  The tender planned for 5 March 2009 is expected to be officially confirmed at 4.00 pm on 4 March 2009.

From 5 March 2009, it is expected that one tender for the issue of Treasury Notes will be conducted most weeks (generally on a Thursday).  Unless otherwise advised, bids will be able to be lodged between 10.15 am and 10.30 am on the day of the tender, with tender results to be available to bidders shortly after the tender close.

  • Unless otherwise advised, settlement of a Treasury Note tender will take place on the business day following the tender.

All Treasury Note tenders will be officially announced at 4.00 pm on the business day prior to the day of the tender.  Tender announcements will provide full details of the tender, including details of the notes that are being offered.  Notification of tender announcements and results will be able be available by subscribing to the AOFM email service.

Tender announcements and results in relation to issuance of Treasury Notes will also be broadcast via the real-time financial information services provided by Bloomberg and Thompson Reuters.  The relevant pages are as follows:

Bloomberg Thompson Reuters
AOFM2 AOFM02

The term to maturity of the Treasury Notes offered will normally range from around one month to six months.  It is expected that for most tenders, bidders will be offered Treasury Notes with two or three different terms to maturity.

In deciding the volume and term to maturity of the Treasury Notes to be offered at a particular tender, the AOFM will consult with market participants and investors.

Taxation

The following information concerning the tax treatment of Treasury Notes is of a general nature only and is not to be treated as binding on the Australian Taxation Office.

Tax outcomes for holders of Treasury Notes may differ depending on their particular circumstances.

The increase in the value of Treasury Notes between the date on which the Treasury Notes are purchased or otherwise acquired by a person (whether as the original noteholder or not) and the date on which the Treasury Notes are disposed of or redeemed will be assessable income for the purposes of the Income Tax Assessment Act 1936 and will be liable to income tax under the laws of the Commonwealth.

Because the excess realised by a non-resident noteholder from the sale or redemption of Treasury Notes is included in assessable income, the excess is not interest for withholding tax purposes.  Interest withholding tax is therefore not levied on non-resident noteholders.  For further information on this matter see Taxation Ruling No. IT 2054.

For more information regarding taxation matters, please contact the Australian Taxation Office or a tax adviser.

Last updated: 21 March 2014