Commonwealth sets new record for funds raised through the bond market in one issue

The raise is the Australian government’s sixth syndicated Treasury bond sales since the onset of the coronavirus crisis.

The commonwealth government has set a record for the amount of funds raised through the bond market in one issue as it tapped the market for $25bn.

The government’s Australian Office of Financial Management has raised $25bn from a syndicated sale of new Treasury bonds that expire in 2026, with an issue that offers a yield to maturity of 0.47 per cent.

The monster bond attracted bids worth $66.1bn, with the $25bn tranche priced at 100.177 basis points over the Bank Bill Swap Rate.

Working on the raise was ANZ, Bank of America, Deutsche Bank and JPMorgan as joint lead managers.

The raise is the Australian government’s sixth syndicated Treasury bond sales since the onset of the coronavirus crisis.

In April it raised $13bn, $19bn in May, $17bn in July, another $15bn in July and $21bn in August.

The bond offerings come after the listed AusNet Services launched a hybrid bond issue last week, securing at least $500m with a yield of around 3 per cent.

Previously, domestic investors have been the biggest supporters when it comes to buying Australian government bonds, but in July there was more take-up from investors offshore, with buyers out of North America and Britain collectively offering the greatest level of investment ahead of domestic investors.

Last month, about half of the take-up was from domestic investors, and that was followed by investors out of Asia, (excluding Japan), accounting for 22.7 per cent of the take-up.

Asian investors have been strong supporters of Australian government bonds this year.