Someone just bought $500 million in Australian government bonds in a single trade

Mark Carwardine / Barcroft Media via Getty Images)

An Australian government bond issue has, for the second time in two months, been purchased in full by just one buyer.

The government announced the completion of a $500 million bond sale this morning, for bonds with a maturity date of December 2021 and a yield of 2%.

The total value of bids received was just shy of $4 billion, which means that buyer demand was almost eight times the amount of bonds on issue.

Commonwealth Bank’s senior rates strategist Phillip Brown told Business Insider that bonds with this maturity ratio have been in high demand lately.

“The last tender of this bond drew a coverage ratio of 6.58 times,” Brown said.

However, of the 31 bidders who made an offer only one was successful. This table shows the transaction details:

Australian Office of Financial Management

According to Brown, there were no key indicators that suggested a one-buyer transactions was forthcoming.

“The bond didn’t seem to be showing any signs of pressure or unusual behaviour before the tender,” he said.

“The bond was cheap on our relative value scan, but in line with other bonds around it.”

This mornings’s sale follows a similar situation in early July, in which a sole bidder purchased $800 million of Australian government bonds with a 2029 expiry date.

That remains a record high for one bidder, based on official statistics dating back to 1982.

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