The CEO of the Australian Office of Financial Management (AOFM), Rob Nicholl, told an audience in Sydney that Australian government bonds with a 30 year tenor could be inevitable in a speech covering the progress and expectations in developing the ACGB market. The AOFM is “open to the prospect of a further curve extension, including to 30 years”. The AOFM has been lengthening the average maturity of government debt from 5 years to 6.5 years since 2010. Nicholl said longer bonds help to “insulate the budget from the near-term impact of rising yields…Rising future yields will only impact the marginal cost to government of future issuance, not the cost of the stock that has already been issued.” Demand for longer bonds has come from “insurance and pension funds, together with some large fund managers, both domestic and offshore that has made it possible for the AOFM to sustain a longer issuance bias.” He indicated that the AOFM was optimistic that the recent announcement of a 20 year futures contract would help promote liquidity and prompt semis and corporates to issue long-dated paper.