6.19pm – Apr 14, 2020

Jonathan Shapiro

The Australian government's debt agency attracted a stunning $18.4 billion of orders for its new November 2024 bond as global fixed income investors rushed to snap up the attractively priced sovereign debt issue.

On Tuesday, the Australian Office of Financial Management launched the sale of the new bond as it seeks to raise what analysts estimate could be up to $300 billion of new debt over fifteen months to fund the economic response to the COVID-19 lockdown.

The AOFM earlier this month told the bond market that it would raise about $5 billion a week via bond auctions, sell around $4 billion of short term Treasury notes, and conduct several syndicated offers of bonds.

Syndications are akin to capital markets transactions in which banks are hired to build a book of buyers that subscribe directly to the bond offer. The AOFM hired ANZ, Deutsche Bank, UBS and Westpac Institutional Bank to act as joint lead managers for the sale, which is expected to price on Wednesday.

Late on Tuesday, the managers of the bond offer told prospective buyers that over $18.4 billion of firm orders had been placed, up from a previous update of $13.5 billion.

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