11 May 2011
Issuance Of Commonwealth Government Securities
This notice provides details of planned issuance of Commonwealth Government Securities by the Australian Office of Financial Management (AOFM) on behalf of the Australian Government over the remainder of the current financial year (that is, the period to 30 June 2011) and during the 2011-12 financial year (1 July 2011 to 30 June 2012).
Issuance of Treasury Bonds to date this financial year totals approximately $45.6 billion in face value terms. Over the remainder of the current financial year Treasury Bond issuance of around $10 billion is planned.
A new Treasury Bond line maturing in 2023 is planned to be issued prior to end-June 2011.
The total face value amount of Treasury Bonds on issue at end-June 2011 will be around $161 billion, an increase of around $37 billion on end-June 2010.
Treasury Bond issuance in 2011-12 is expected to be around $51 billion. After accounting for maturities of $14 billion this represents net issuance of $37 billion.
The face value amount of Treasury Bonds on issue at end-June 2012 is projected to be around $198 billion.
In 2011-12 tenders will continue to be held on Wednesdays and Fridays, with details of the bond lines and amounts to be offered in a particular week announced at noon on the Friday of the preceding week. The face value amount offered at each tender will be in the range $500 million to $1.2 billion, unless otherwise advised.
Issuance in 2011-12 is expected to include one or two new mid-curve Treasury Bond lines.It is planned to extend the Treasury Bond yield curve out to 15 years. This may be achieved over the next two years (commencing 2011-12) depending on market conditions
Treasury Indexed Bonds
Over the remainder of the current financial year, two tenders for the issue of Treasury Indexed Bonds are planned. The face value amount offered at each tender is expected to be $200 million.
The total face value amount of Treasury Indexed Bonds on issue at end-June 2011 will be around $13.9 billion, an increase of $2.5 billion on end-June 2010.
Issuance of Treasury Indexed Bonds in 2011-12 is expected to be around $2 billion. Treasury Indexed Bonds will be issued by tender each month, except for December 2011 and January 2012. The tenders will be held on Tuesdays with details of the bond lines and amounts to be offered announced at noon on the Friday of the preceding week.
There are no plans to issue any new Treasury Indexed Bond lines in 2011-12.
The face value amount of Treasury Indexed Bonds on issue at end-June 2012 is projected to be around $15.9 billion.
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. It is planned to keep at least $10 billion of Treasury Notes on issue at all times so as to maintain a liquid market.
Aussie Infrastructure Bonds
Some of the proceeds from the issuance of Commonwealth Government Securities in 2011-12 may be used to finance the Government’s investment in the National Broadband Network, which would then be reported as Aussie Infrastructure Bonds in the budget papers.