In mid-September YieldReport wrote of the AOFM’s plans to issue a Commonwealth security with a 30 year tenor. The AOFM has now announced it intends to issue a new March 2047 bond via syndication, subject to market conditions, in the week beginning 10 October 2016.
Issuing long term bonds has become the fashionable thing for sovereigns to do in recent times. Italy has just issued its inaugural 50 year bond and Ireland has joined Mexico to be among the few countries to have issued “centennials” (100 year bonds). In this context, 30 years looks downright conservative.
There’s no shortage of investors willing to buy long-duration bonds either. €18.5 billion (AUD$27 billion) of orders were placed for €5 billion (AUD$7.4 billion) of Italian 50 year bonds. Even Ireland, only a few years after being branded an economic basket case, managed to sell its 100 year bonds at a lower yield than a US 30 year Treasury bond earlier this year, so a AAA-rated country such as Australia should have little trouble attracting investors.
Related articles
New Aussie 30 year bond is nearly here
Australian 30 year bond back on radar