23 October 2012
Issuance of Commonwealth Government Securities
The Australian Government has released updated economic and budget forecasts. This notice provides details, consistent with those forecasts, of planned issuance of Commonwealth Government Securities (CGS) by the Australian Office of Financial Management (AOFM) on behalf of the Australian Government over the remainder of the current financial year (that is, to 30 June 2013).
The gross volume of CGS on issue at 30 June 2013 is expected to be broadly the same as estimated at the time of the 2012-13 Budget.
Treasury Bond issuance in 2012-13 is now expected to be around $45 billion in face value terms. This is an increase of $10 billion on the issuance expected at the time of the 2012-13 Budget.
The increased Treasury Bond issuance will be fully offset by a reduction in the volume of Treasury Notes on issue. An impact of this switch will be to reduce the exposure to refinancing risk associated with short-term Treasury Note funding. It will also have the impact of lengthening the weighted average duration of the AOFM's debt portfolio as a whole.
Subject to market conditions a new Treasury Bond maturing in 2025 will be issued sometime in 2013.
Treasury Bond issuance to date this financial year totals approximately $17.3 billion in face value terms.
Treasury Indexed Bonds
Treasury Indexed Bond issuance in 2012-13 is expected to be around $2 billion in face value terms (unchanged on the issuance expected at the time of the 2012-13 Budget). Issuance to date this financial year is $900 million in face value terms.
Treasury Notes are a short-term discount security primarily used for within-year financing. The 'floor' of $10 billion of Treasury Notes on issue will no longer be maintained and there are expected to be times when there will be no Treasury Notes on issue.
Aussie Infrastructure Bonds
Some of the proceeds from the issuance of Commonwealth Government Securities in 2012-13 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.