SAFA passed on government guarantee

The South Australian Government Financing Authority (rated AAA) launched and priced a A$500 million bond on Friday. The bond, which comes without a Commonwealth government guarantee and matures in April 2015, priced at a margin of 68 basis points over Commonwealth  bonds and 12 bps over swaps.

At the same time the Australian Office of Financial Management (which of course borrows to cover the Australian government's budget deficit) tendered A$700 million of the May 2013 series of Commonwealth bonds. The offer was oversubscribed 2.7 times and achieved a weighted average yield of 5.21 per cent.
 
AOFM sold A$500 million of May 2021 Commonwealth bonds on Wednesday, at a weighted average yield of 5.45 per cent and received bids for 2.5 times the value of bonds on offer.

AOFM's New Zealand counterpart, the New Zealand Debt Management Office, had more luck with its Treasury Bill tender on Tuesday than it did the week before, selling NZ$400 million of bills, against bids totalling NZ$859 million for the two tranches on offer.

On Thursday, NZ$150 million of April 2015 government bonds were sold, along with NZ$100 million of December 2017 bonds and NZ$200 million of May 2021 bonds. Weighted average yields achieved were 5.35 per cent, 5.69 per cent and 6.10 per cent and oversubscriptions amounted to 2.73 times, 1.9 times and 3.93 times, respectively.

This was a particularly good result for the May 2021 offering.