Treasury's Debt Management Office gets NZ$2.9 billion of bids for NZ$900 million of bonds in biggest tender since September 2011

Treasury's Debt Management Office gets NZ$2.9 billion of bids for NZ$900 million of bonds in biggest tender since September 2011

New Zealand’s Debt Management Office got about $2.9 billion of bids for the $900 million of government bonds sold in a tender today, underlining the appeal of the nation’s relatively attractive yields.

The DMO sold $300 million of 6 percent bonds maturing on Dec. 15, 2017, bonds at a weighted average yield of 3.33 percent. It sold $300 million of 6 percent, March 15, 2019, bonds at a yield of 3.54 percent and $300 million of 5.5 percent April 15, 2023, bonds at a yield of 4.01 percent.

The 2017 bonds were the most popular, receiving bids of $1.58 billion, while the 2019s garnered $802 million and the 2023s attracted $535 million of bids. The tender was the largest since September.

The DMO has a target of $13.5 billion of debt sales this fiscal year but has slipped behind the run rate needed to meet that total by June 30. The DMO has nine more sales scheduled before June 30.

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6 Comments

6%....ouch seems high...
regards

What are you talking about?

Well the way I read this,
"The DMO sold $300 million of 6 percent bonds maturing on Dec. 15, 2017"
Is we are paying 6%........that seems high.........
regards
 

6% is the coupon rate, the yield is an average of 3.33. The buyer pays (say) $1.2m for a $1m face value bond. The buyer pays $1.2m to get $60,000 of interest per year plus $1m when the bond is repaid. Its like shares, the dividend is x amount per share but the yield depends on the market value of the share, as the price goes up the dividend yield goes down.

....... just tell him that we've reached " peak bonds " , and steven will go away happy as a lamb .....
regards

Cash and bonds, the Mother of all bubbles!