ANOTHER WHALE: Someone just bought $600 million in Australian government bonds in a single trade

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Another single buyer has successfully bid for the entirety of an Australian government bond issue.

This time $600 million in bonds were snapped up, following the single-trade purchase of a $500 million issue on September 1.

Here are the results from the tender:

Australian Office of Financial Management

Both of the recent issues had the same yield and maturity date – 21 December, 2021 with a coupon rate of 2%.

“It’s interesting that it’s the same bond, that’s certainly unusual,” ANZ’s senior rates strategist Martin Whetton told Business Insider, adding that the market views these issues as being on the cheaper side.

Official figures released by the Australian government revealed strong demand for today’s tender, which had a coverage ration of 7.48 times.

So for the bond issue of $600 million, the government received almost $4.5 billion worth of offers.

But once again, despite a number of competing bidders, only one was successful.

In fact, this bond issue received 41 bids – 10 higher than the number for the previous single buyer trade in early September.

Noting the higher number of bidders, Whetton said the series offer with a December 2021 maturity was clearly a “bond in demand”.

The recent demand follows the issue of an $800 million bond in early July, purchased by just one bidder.

Interestingly though, that bond had a longer tenor, with a maturity date of 21 April, 2029 and a 3.25% coupon.

Longer duration bonds have a greater sensitivity to price movements which is helpful when yields fall.

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