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Australia's 30-Year Bonds Are a Treat for Yield-Hungry Debt Investors

  • Nation’s longest nominal bond is currently June 2039 security
  • Follows gradual lengthening of curve from less than 15 years
Photographer: Brendon Thorne/Bloomberg
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Yield-hungry debt investors are in for a treat. Australia’s decision to extend its bond curve out to 30 years for the first time means the highest interest-rate available from a major developed sovereign market is about to get even more appealing.

It’s one of the few such countries that doesn’t already issue debt of that tenor and the Australian Office of Financial Management is betting the global hunt for yield will ensure investors are keen to snap up the new security it plans to sell next month. The longest bond currently on issue from the South Pacific nation -- due in 23 years -- yielded 2.91 percent as of 8:40 a.m. on Wednesday in Sydney, and the new longer one announced by the government funding arm is likely to have a higher yield than that.