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First IIB tender for 2014 sees new 2030 linkers receive a successful weighted average yield of 2.9808%

Bonds
First IIB tender for 2014 sees new 2030 linkers receive a successful weighted average yield of 2.9808%
13th Feb 14, 2:17pm by Craig Simpson

Hot on the heels of the government bond repurchase tender yesterday the NZ Debt Management Office (NZDMO) tendered $200 mln of the 2030 inflation-indexed bond which attracted solid demand. The tender had a coverage ratio of just under 2.5x.

According to Westpac in their preview of this tender, there are several factors supporting this issue, including the addition of the NZ inflation linked bonds ("linkers") in the global benchmark index.

With the latest CPI number coming  in at 1.5% pa. this would give the IIB's an indication nominal yield of approxinately 4.5%.

The current yield on the NZ government bond with the longest duration (maturing in 2023) is 4.60%.

20 September 2030 Today #513 Prior #511 Prior #509 Prior #507
Series offered tender
Feb 13, 2014		 issued
Dec 5, 2013		 issued
Nov 21, 2013		 issued
Nov 7, 2013
Total Amount Offered ($million) 200 200 200 200
Total Amount Allocated ($million) 200 200 200 200
Total Number of Bids Received 56 72 32 71
Total Amount of Bids Received ($million) 473 615 268 603
Total Number of Successful Bids 17 20 25 24
Highest Yield Accepted (%) 3.02 2.890 2.850 2.660
Lowest Yield Accepted (%) 2.955 2.840 2.670 2.565
Highest Yield Rejected (%) 3.200 3.100 2.990 2.820
Lowest Yield Rejected (%) 3.020 2.890 2.850 2.670
Weighted Average Accepted Yield (%) 2.9808 2.8780 2.7552 2.6339
Weighted Average Rejected Yield (%) 3.0751 2.9465 2.8862 2.7256
Amount Allotted at Highest Accepted Yield
as Percentage of Amount Bid at that Yield*		 25 87 44 100
Coverage Ratio 2.365 3.075 1.340 3.015

*Individual allotments may vary due to rounding.

 

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