24 June 2013
Multiple Price Tenders for Treasury Indexed Bonds
From July 2013, tenders for the issue of Treasury Indexed Bonds will be held on a multiple price basis rather than a single price basis. Allotments will be made at the yields bid, rather than at the highest yield accepted. Acceptance of bids will continue to be made in ascending order of real yield bid, i.e. from the lowest yield bid to the highest yield accepted.
This aligns the basis for setting prices at Treasury Indexed Bond tenders with that used at tenders for the issue of Treasury Bonds and Treasury Notes.
There is also a change to the minimum increment for yields of bids at Treasury Indexed Bond tenders. Yields must be submitted in whole multiples of 0.0025% (e.g. 3.0000%, 3.0025% or 3.0050%).
The above changes follow feedback and consultation with indexed bond market participants.
Following the launch of Exchange-traded Australian Government Bonds on the Australian Securities Exchange it is no longer possible for investors to purchase Treasury Bonds or Treasury Indexed Bonds through the small investor bond facility operated by the Reserve Bank of Australia (RBA).
New Information Memoranda for Treasury Bonds and Treasury Indexed Bonds reflecting these changes have been issued today.