Demand appears to have recovered for the 20 September 2025 inflation-indexed New Zealand Government bonds.
The previous issue in November was was barely covered with only $268 mln in bids received for the $200 mln offered.
However, today's tender was more than three times covered with $615 mln in bids received for the $200 mln offered.
Some of the renewed interest could be as a result of these bonds being included in the Barclays inflation-linked government bond index (effected December 31). Westpac suggests this tender provides offshore investors with an opportunity to invest ahead of the index re-balancing event.
Now, today's successful bidders got a yield of 2.878% above inflation, the highest this year.
The latest CPI came in at 1.2% pa. On that basis, these IIBs would give 4.078%.
The current yield on a non-inflation indexed 10-year NZ government bond is 4.75%.
This is the final inflation indexed bond issue for 2013 with the next tender likely to be in the latter part of January or early February 2014.
Expectations are the NZDMO will publish its bond tender schedule following the Half Year Economic and Fiscal Update on December 17.
The government had NZ$75.5 bln of securities on issue as at October 31, 2013.
| 20 September 2025 | Today #511 | Prior #509 | Prior $507 |
| Series offered |
2.00% 20 Sep 2025 |
issued Nov 21, 2013 |
issued Nov 7, 2013 |
| Total Amount Offered ($million) | 200 | 200 | 200 |
| Total Amount Allocated ($million) | 200 | 200 | 200 |
| Total Number of Bids Received | 72 | 32 | 71 |
| Total Amount of Bids Received ($million) | 615 | 268 | 603 |
| Total Number of Successful Bids | 20 | 25 | 24 |
| Highest Yield Accepted (%) | 2.890 | 2.850 | 2.660 |
| Lowest Yield Accepted (%) | 2.840 | 2.670 | 2.565 |
| Highest Yield Rejected (%) | 3.100 | 2.990 | 2.820 |
| Lowest Yield Rejected (%) | 2.890 | 2.850 | 2.670 |
| Weighted Average Accepted Yield (%) | 2.8780 | 2.7552 | 2.6339 |
| Weighted Average Rejected Yield (%) | 2.9465 | 2.8862 | 2.7256 |
|
Amount Allotted at Highest Accepted Yield as Percentage of Amount Bid at that Yield* |
87 | 44 | 100 |
| Coverage Ratio | 3.075 | 1.340 | 3.015 |
*Individual allotments may vary due to rounding.
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