The New Zealand Debt Management Office, a unit of Treasury that acts as the government's debt manager, sold NZ$900 million worth of bonds today in an auction that attracted bids worth about NZ$2.1 billion.
The latest Crown debt issue comes ahead of next Tuesday's pre-election economic and fiscal update, where the government's borrowing programmes for both the current and next financial year are tipped to be increased to cover the NZ$4 billion Earthquake Commissioncost blowout and slower expected economic growth.
After issuing NZ$20 billion worth of bonds in the 2010/11 year, the NZDMO currently intends to issue up to NZ$13.5 billion in the current 2011/12 year and NZ$12 billion in the 2012/13 year.
The NZ$900 million issue follows a record equalling NZ$1 billion bond tender in late September, the day before New Zealand's sovereign credit rating was downgraded to AA from AA+ by both Standard & Poor's and Fitch.
Today's tender saw NZ$500 million worth of bonds due to mature on April 15, 2015 sold, NZ$300 million due to mature on December 15, 2017, and NZ$50 million set to mature on each of May 15, 2021 and April 15, 2023 sold.
The weighted average successful yield on the 2023 bond was 4.85%, which is up from the record low 4.45% on September 29. On the 2015 bond it was 3.48%, 2017 bond 4.21% and 2021 bond 4.70%.
The coupon rate on the 2015, 2017 and 2021 bonds was 6%, and 5.5% on the 2023 bond.
A total of 51 bids were submitted for the NZ$900 million worth of government bonds offered with 23 successful bids.