TREASURY BOND CONVERSION TENDER ANNOUNCEMENT
CONVERSION TENDER NUMBER 1
The Australian Office of Financial Management (AOFM) will hold a conversion tender for Treasury Bonds on 23 October 2001. The conversion tender will be for a maximum of $300 million face value of the 10.00% February 2006 Treasury Fixed Coupon Bond (TB113) to be converted into the equivalent face value of the 5.75% June 2011 Treasury Fixed Coupon Bond (TB117). The Commonwealth reserves the right to convert any amount up to the announced maximum face value of bonds.
Details of the conversion tender are set out below.
|Offer Stock||Destination Stock|
|Maturity date||15 February 2006||15 June 2011|
|Maximum amount to be converted ($m)+||300|
|First interest payment due*||15 December 2001|
|First interest payment amount
(per $100 face value)
+ The total amount allotted may differ from the amount
offered due to rounding of amounts allotted at the highest accepted yield.
* Interest will be paid at half-yearly intervals thereafter.
Applications for Stock
Bids may be lodged electronically through the Reserve Bank Information and Transfer System (RITS) between 11:45 a.m. and 12.15 p.m. Australian Eastern Standard Time on Tuesday, 23 October 2001.
All bids must comply with the Terms and Conditions of Issue for Treasury Bonds (dated 27 September 2001), copies of which are available from any branch of the Reserve Bank of Australia or the AOFM. Copies are also available on the Reserve Bank's website (www.rba.gov.au) and the AOFM website (www.aofm.gov.au).
Bids must be submitted on the basis of yield to maturity, expressed to a maximum of three decimal places and in whole multiples of 0.005%.
Allotment of Stock
The Reserve Bank of Australia will announce a yield for the offered stock (TB113) at 11:45 a.m. on the day of the conversion tender, 23 October 2001. Given the announced yield for the offered stock, tenderers will indicate the yield for the destination stock (TB117) at which they would be prepared to convert an equal face value of the offered stock to the destination stock.
Acceptance of bids will be made in ascending order of yield bid, i.e. from the lowest yield bid to the highest yield accepted.
At the highest yield accepted, the amount of conversion tender stock allotted to each bidder will, in the first instance, be calculated proportionately to the amount of bids at that yield and then in the case of bids of $1 million or more (face value), rounded to the nearest $1 million (face value) and in the case of bids under $1 million (face value), rounded up to the next $100,000 (face value). However, no bidder will be allotted an amount greater than the amount bid. In allotting stock at the highest accepted yield, amounts by which the total bids from any one tenderer exceed the amount offered at tender will be disregarded.
The Treasurer reserves the right to accept any bid for the full amount of a tender or any part thereof and to reject any bid or part thereof.
Announcement of results
The results of Conversion Tender No. 1 are expected to be announced at 12.45 p.m. Australian Eastern Standard Time on Tuesday, 23 October 2001.
Successful bids for Treasury Bonds offered in Conversion Tender No. 1
must be settled during RITS system hours on Thursday, 25 October 2001.