AOFM opens its diary to ANZ bankers amid ASIC probe

The federal government debt agency has met with ANZ bankers as it confronts refinancing a $80bn pile of Covid-19 debt, softening its stance toward the bank which was frozen out of all government bond deals.

ANZ has been benched from government debt deals in the wake of a trading scandal. (Photo by Lisa Maree Williams/Getty Images)

The federal government’s debt agency appears to be softening its position toward ANZ and has met twice with its bankers this year since sidelining it from all sovereign bond auctions in the wake of a regulatory investigation.

ANZ has had two audiences with the Australian Office of Financial Management since it was reported for allegedly rigging bond rates at the expense of the taxpayer in a $14bn placement that happened in April 2023. ANZ denies any wrongdoing, but it has been removed from any AOFM deals while the corporate regulator’s investigation takes place.

ANZ met with the AOFM on February 5 and again last Wednesday, according to sources familiar with their engagement, and confirmed by the AOFM and ANZ.

At the February 5 meeting, AOFM staff were briefed by ANZ’s chief economist, Richard Yetsenga, alongside the bank’s head of geopolitical risk, Cameron Mitchell.

This was followed by another meeting on March 12, when several of the agency’s most senior staff attended briefings by the bank and key investors at its Sydney office.

AOFM chief executive Anna Hughes was part of the debt agency’s delegation.

AOFM CEO Anna Hughes.

The Australian Securities & Investments Commission is probing ANZ’s role as joint-lead risk manager in the $14bn 2023 bond deal, where market pricing moved against the government in the minutes before terms were struck.

ASIC is also probing ANZ trading data supplied to the AOFM which was allegedly inflated to secure a coveted place on the government’s panel for facilitating bond sales.

This data overstated ANZ’s turnover by almost $54bn; sources indicated this was driven by insufficient risk and oversight controls within the ANZ markets team.

ASIC chair Joe Longo has said the regulator would arrive at a preliminary finding by mid-2025.

Ms Hughes, the AOFM boss, often meets with senior bankers in the ordinary course of running the agency, with her official diary disclosing five lunches or dinners with UBS, Deutsche Bank, and Barrenjoey over October, November and December.

Ms Hughes last met ANZ for lunch in February 2024, just as ASIC was intensifying its fact finding efforts and weeks before its probe was official.

Ms Hughes also spoke with ANZ CEO Shayne Elliott and its institutional bank boss on July 18 over Microsoft Teams last year, where the outgoing ANZ CEO “personally apologis(ed) to the Chief Executive at AOFM for ANZ’s failures” according to documents released under Freedom of Information and reported by The Australian in November.

ANZ CEO Shayne Elliott at the bank’s AGM. Picture: Arsineh Houspian/NewsWire

The AOFM is confronting a heavy year for refinancing Australia’s Covid-19-era debt.

Ms Hughes, who took over running the AOFM in November 2022, has previously warned up to $80bn will need to be repaid and refinanced, with $1.5bn in bonds set to hit the market next week.

Market sources who spoke to The Australian noted the AOFM’s recent efforts to reach out to ANZ came amid greater sensitivity to having the full cooperation of the capital markets and making the refinancing task as efficient as possible.

An AOFM spokesman said the agency engaged with ANZ given its role as market maker in Treasury bonds.

“As such, they provide the AOFM with opportunities to meet with investors,” he said.

“The AOFM has not discussed the ASIC investigation with ANZ. We cannot provide comments on the case as it is still ongoing.”

Even so, ANZ has been missing in action in government debt markets since the start of the year, according to data published by KangaNews. ANZ reported zero Australian domestic bond deals in 2025.

Sources said ANZ’s absence may cost the bank up to $100m in foregone syndicate fees.