The Tasmanian Government’s financing authority, Tascorp, currently has six lines of benchmark bonds on issue in the domestic bond market, with maturities ranging from November 2016 to February 2026s. The average time to maturity is around 4.6 years (when weighted by face value). This may dramatically change soon as Tascorp has mandated several investment banks to issue a new 30 year bond.
A 30 year bond issue will lengthen Tasmania’s debt profile drastically and investors will be placing a large degree of faith in the Tasmanian economy. The new long dated debt issue is an interesting development and begs the question as to whether Tascorp is taking advantage of low rates and the demand for yield in the current environment to lock in a once-in-a-generation low cost of debt?