Issuance of Australian Government Securities – Budget 2017-18

10 May 2017

This notice provides details of planned issuance and buybacks of Australian Government Securities (AGS) by the Australian Office of Financial Management (AOFM).

Treasury Bonds

Issuance to date this financial year totals $92 billion.

Gross Treasury Bond issuance in 2017-18 is expected to be around $80 billion, most of which will be achieved via tenders. 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 $34 billion.

Weekly Treasury Bond tender issuance of around $1.4 billion each week (in addition to tenders held in conjunction with buyback tenders) will be maintained for the remainder of 2016‑17 and into 2017-18.

It is planned to establish new bond lines maturing in November 2022 and November 2029 in 2017-18. Syndicated tap issues of existing long-dated bond lines are also planned, in accordance with previous advice.

A new May 2041 bond line is now planned to be issued in early 2018-19 rather than later this calendar year as previously foreshadowed. This is part of the AOFM’s commitment to support the operation of the 20 year Treasury Bond futures contract.

In accordance with established practice, details of the bond lines and amounts to be offered each week will be announced at noon on the preceding Friday.

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.

The frequency of buyback tenders will increase: two tenders will be held during most months. 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.

$11 billion of short-dated Treasury Bonds have been repurchased to date in 2016‑17. Buybacks of around $15 billion are expected in 2017-18. The final volume will vary depending on the quantity of Treasury Bonds offered to the AOFM at syndicated deals, and purchases from the RBA.

Treasury Indexed Bonds

Issuance of Treasury Indexed Bonds (TIBs) to date this financial year totals $2.8 billion in face value terms. TIB issuance in 2017-18 is expected to be around $5 billion.

Two tenders for the issue of TIBs will be conducted in most months. A new TIB maturing in 2027 or 2028 is planned to be issued via syndication during calendar 2017.

The AOFM expects to repurchase amounts of the November 2018 TIB line prior to its maturity. This may be undertaken via buyback tenders and/or in conjunction with the issue of the new line.

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