20 February 2004
PROCEDURES FOR EXECUTION OF AUSTRALIAN DOLLAR INTEREST RATE SWAPS
This notice outlines changes to the procedures employed by the Australian Office of Financial Management (AOFM) to execute Australian dollar interest rate swaps in 2003-04, which were detailed in Operational Notice No. 15/2003 issued on 8 October 2003. All other details of the procedures outlined in Operational Notice No. 15/2003 remain unchanged.
Operational Notice No. 15/2003 stated that bids would be sought for two nominated
swap transactions at each tender. In future tenders may also be conducted for
one nominated swap transaction.
In the case of tenders for two swap transactions, a bid will no longer be sought for Swap Two assuming both Swap One and Swap Two are executed with the same bidder i.e. only one bid for each swap will be sought.
For all swaps notional amounts dealt will be either AUD 100 million, AUD 150 million or AUD 200 million. Bidders will be advised as to the notional amount for which bids are being sought.
For some tenders bidders will be offered the option as to the notional amount
bid i.e. AUD 100 million, AUD 150 million or AUD 200 million. In such cases
bidders can only submit one bid – that is it is not possible to lodge
a series of bids for different notional amounts. The AOFM will have the option
of dealing the amount offered or a smaller amount.