Fed funding machinery turning over
The Australian Office of Financial Management cranked up its plans to sell more government bonds, with two tenders of $600 million each for the week, a practice set to become a near permanent feature of the market.The AOFM also announced the next three RMBS issues in which it will be a cornerstone investor. AMP Bank, Bendigo and Adelaide Bank and Credit Union Australia will be the beneficiaries of AOFM support for RMBS issues that should be priced by mid-March. No other details were provided. As for the two issues of government bonds, AOFM sold $600 million of April 2012 CGS at a yield of 2.99 per cent on Wednesday; and on Friday it sold $599 million of June 2011 CGS at a yield of 2.93 per cent.AOFM is still being rushed with high levels of investor demand. Wednesday's issue was 4.8 times oversubscribed and Friday's issue 4.5 times. This contrasts with the recent experience of the German government, which suffered a 20 per cent shortfall at a bond auction, as a result of investors demanding greater yield.