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Australia’s Blistering Bond Sales a Breeze Thanks to RBA
2020-04-24 03:35:28.51 GMT

By Garfield Reynolds
(Bloomberg) — Australia is seeing some of the strongest
demand on record as it sells bonds at a record pace, backstopped
by the RBA’s purchases of debt from the secondary market. Money
markets have calmed enough for the central bank to trim
purchases in recent weeks, though Governor Lowe’s pledge to
boost buying again if needed could be called upon assuming
issuance sustains its blistering pace.
On Friday, the Australian Office of Financial received 7.26
times as many bids as the A$1.5b of April 2023 bonds offered,
the strongest demand since July 2018. Soon after, the government
funding arm said it plans to sell A$2.5b of bonds on April 28,
so the total raised for April will come to A$28.1b. That’s close
to the record for quarterly issuance of A$35.9b at the start of
2020.

Australia needs plenty of money (It’s set to sell an
unprecedented A$21.5b of T-bills this month) to fund spending
plans to counter the pandemic’s impact. Investors are showing a
strong belief that the RBA will help keep the bond markets calm
while that happens.

To contact the reporter on this story:
Garfield Reynolds in Sydney at greynolds1@bloomberg.net