YieldReport has noted two AOFM bond tenders recently in which one bidder has bought the entire offering. The most recent occasion was three weeks ago at the very start of September and at that tender $500 million December 2021s were bought by one bidder.
Today the AOFM offered $600 million December 2021s for purchase by tender and again, one bidder bought the lot. What caught people’s attention was the fact the this tender and the previous one were for the same bonds, 2.00% December 2021s.
It may be just a coincidence. Then again, perhaps one of the investment funds out there thinks the December 2021s are what it needs. $600 million is not all that much to investors the size of Norway’s sovereign wealth fund or the California Public Employees’ Retirement System (CalPERS) fund. It may even be the RBA, which has $3.5 billion to play with after it sold the AOFM $3.5 billion January 2018s earlier today in what the AOFM described as “cash management activities”.
