Australian Government, the Australian Office of Financial Management

Operational Notice

No: 7/2012
4 September 2012

CPI Re-referencing: Impact on Treasury Indexed Bonds

The Australian Bureau of Statistics has announced that the Consumer Price Index (including the ‘Weighted Average of Eight Capital Cities: All-Groups Index’ used in calculations relating to Treasury Indexed Bonds) is to be re-referenced (see http://www.abs.gov.au/AUSSTATS/abs@.nsf/mf/6401.0):

“From the September quarter 2012, all index numbers will be calculated on a new index reference period of 2011-12. This will result in the index numbers for each index series being reset to 100.0 for the financial year 2011-12. Period-to-period percentage changes may differ slightly to those previously published due to rounding and the re-referencing. These differences do not constitute a revision.”

The Kt values relating to Treasury Indexed Bond coupon interest payments in November and December 2012 are as published by the Reserve Bank of Australia:

Treasury Indexed Bond line

Kt

20 August 2015

164.14

20 August 2020

151.89

21 February 2022

100.62

20 September 2025

108.35

20 September 2030

105.74

The CPI numbers expressed on the new base as published by the Australian Bureau of Statistics will be used for the purpose of calculation of future p and Kt values for all Treasury Indexed Bonds.

Pricing formulae for Treasury Indexed Bonds are available on the Australian Office of Financial Management’s website at http://aofm.gov.au/content/pricing_formulae.asp.

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