SYDNEY Feb 21 Australia is expected to raise at
least A$8 billion ($6.1 billion) in a new bond offer, two fund
managers said, a month after the government sold a record A$9.3
The Australian Office of Financial Management (AOFM), the
federal government's funding agency, launched a 12-year issue on
Tuesday with a margin of 13.5 basis points to 16.5 basis points
over the implied yield of 10-year bond futures.
The AOFM did not give indications on the issue size, but
investors looking at the issue said it was going to exceed A$8
The same fund managers said the margin was expected to be
around 14 basis points, which is at the bottom end of price
The investors asked not to be named because they are not
allowed to speak to the press. The AOFM declined to comment.
Demand for the bonds did not seem to be affected by a
potential ratings downgrade. Last year, S&P Global Ratings
warned that Australia could lose its coveted triple-A credit
rating if the government couldn't put its fiscal house in order
by May, when the annual budget is unveiled.
Pricing of the issue, jointly lead managed by ANZ Bank,
Commonwealth Bank of Australia (CBA), Deutsche Bank and Westpac,
is expected on Wednesday.
Separately, the state of Western Australia is seeking to
raise debt maturing in three and five years, according to joint
lead managers CBA and National Australia Bank.
Launch of the offer is expected later in the week. The joint
leads did not disclose issue size or pricing indications.
Western Australian Treasury Corp (WATC) is the funding arm
of the state government and the issuer of the bonds. It is rated
Aa2 by Moody's and AA plus by S&P.
($1 = 1.3043 Australian dollars)
(Reporting by Cecile Lefort)