South Australia has left it late in the year to complete its 2016/2017 funding programme but now it is out of the way. SAFA sold $750 million September 2027s via a syndicated placement for the second transaction for this line. Total final bids were around $1.15 billion.
The bonds were issued at ACGB + 58bps which is the equivalent of 61.5bps over the 10 year futures contract. When these bonds were first issued in early March, they were issued at ACGB + 54.25bps but this time it cost ACGB + 58bps or 51bps over the 10 year futures contract.
63% of the purchasers were domestic, slightly more than was the case in the March transaction. This time central banks doubled their purchases from 9% to 18% and bank trading desks and hedge funds greatly increased their allocations.
This transaction has completed SAFA’s $3.75 billion of term funding for the 2016/2017 financial year. $250 million of the $750 million raised represents pre-funding for 2017/2018. South Australia’s budget will be released on 22 June 2017 and SAFA said it will provide its 2017/2018 funding requirements shortly afterwards.