Aussie Bonds Go to One Buyer With Record A$800 Million Appetite

A single buyer snapped up all A$800 million ($609 million) of Australian government bonds sold Wednesday, the largest ever amount bought by one bidder in auctions that date back to 1982.

The sale of a nominal bond to just one entity hasn’t happened since August 2013, according to data from the Australian Office of Financial Management, the government funding arm. The 3.25 percent notes maturing in April 2029 went off at a yield of 2.72 percent, attracting a bid-to-cover ratio of 4.47, the AOFM said on its website, without identifying the buyer.

The sale came after government bonds had their strongest one-day rally in six weeks on Tuesday, when the Reserve Bank of Australia dashed speculation it would join global counterparts such as the European and Canadian central banks in talking up policy tightening. Governor Philip Lowe also dropped a previous reference to an economic growth forecast of 3 percent and said the recent slowing in output partly reflected temporary factors, like weather, but not all of it.

“The RBA took a slightly dovish turn on Tuesday, not just relative to the comments coming from global peers, but relative to its own previous stance,” said Martin Whetton,  a senior rates strategist at Australia & New Zealand Banking Group Ltd. “A longer-dated note like this could be seen as offering good value after the recent steepening in the curve that had been driven by some of that global hawkishness.”

The AOFM declined to comment on the identity of the buyer.

— With assistance by Michael G Wilson

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