NZ govt bond auction sees lower demand for 2017 and 2019 debt than offered by Treasury, following German bund auction failure overnight

Treasury's latest bond auction failed to attract enough interest for two of the three tranches of government bonds being sold, with shortfalls in 2017 and 2019 bonds mopped up by the Debt Management Office (DMO) accepting more than it had offered for 2021 bonds.

There were slightly higher yields in the latest auction than last week for 2017 and 2019 bonds, but the yield for the 2021 bond fell.

This follows turbulence on global markets overnight, after a six billion euro German bond issue only saw 3.6 billion euro being sold. See more here in 90 at 9.

The DMO sought to auction off NZ$450 million worth of government debt on Thursday afternoon.

NZ$100 million of 2017 debt attracted NZ$90 million worth of bids, which were all accepted. The weighted average successful yield for the 2017 bonds was 3.39%, up from 3.34% on November 17.

NZ$250 million of 2019 debt attracted NZ$240 million of bids, which were all accepted. The weighted average successful yield for the 2019 bonds was 3.64%, up from 3.57% on November 17.

NZ$100 million of 2021 debt attracted NZ$223 million of bids, with NZ$120 million worth of bids accepted. The weighted average successful yield for the 2012 bonds was 3.90%, down from 4.18% on November 10.

2023 bonds, which are set to become the NZ government's benchmark 10-year bond, sold on November 17 at a weighted average successful yield of 3.94%.

(Updates with yields)

This chart records the yields on NZ Goverment bonds on the secondary markets.