The results from the latest inflation-indexed bond offer by the Treasury's Debt Management Office have been released. The details are shown below.
| 2.50% - 20 September 2035 | Today #602 |
Previous #599 |
Previous #594 | Previous #590 | Previous #587 | 1 Year Ago #567 | |
| Series offered | tender May 12, 2017 |
tender Apr. 13, 2017 |
tender Feb. 10, 2017 |
tender Dec. 9, 2016 | tender Nov. 11, 2016 | tender Apr. 14, 2016 | |
| Total Amount Offered ($mln) | 100 | 100 | 100 | 100 | 100 | 100 | |
| Total Amount Allocated ($mln) | 100 | 100 | 100 | 100 | 100 | 100 | |
| Total Number of Bids Received | 49 | 40 | 42 | 50 | 53 | 43 | |
| Total Amount of Bids Received ($mln) | 471 | 234 | 451 | 538 | 456 | 293 | |
| Total Number of Successful Bids | 7 | 20 | 11 | 14 | 14 | 5 | |
| Highest Yield Accepted (%) | 2.1600 | 2.1550 | 2.4200 | 2.4300 | 2.2600 | 2.1400 | |
| Lowest Yield Accepted (%) | 2.1250 | 2.1150 | 2.3950 | 2.4150 | 2.2350 | 2.1400 | |
| Highest Yield Rejected (%) | 2.2700 | 2.2600 | 2.5500 | 2.5750 | 2.3800 | 2.3200 | |
| Lowest Yield Rejected (%) | 2.1600 | 2.1550 | 2.4200 | 2.4300 | 2.2600 | 2.1400 | |
| Weighted Average Accepted Yield (%) | 2.1485 | 2.1426 | 2.4110 | 2.4238 | 2.2498 | 2.1400 | |
| Weighted Average Rejected Yield (%) | 2.1905 | 2.1967 | 2.4501 | 2.4694 | 2.3065 | 2.1902 | |
| Amount Allotted at Highest Accepted Yield as Percentage of Amount Bid at that Yield* | 71.4 | 75.0 | 37.5 | 51.2 | 95.0 | 66.7 | |
| Coverage Ratio | 4.71 | 2.34 | 4.51 | 5.38 | 4.56 | 2.93 |
*Individual allotments may vary due to rounding.
2 Comments
Completely disagree. A govt debt default in that timeframe is a very low chance. Especially as we are going into a period of increasing surpluses and increasing resilience. But would be interested in your evidence as to why that will be true "in 15-20 yrs".
If we go back 20 years - to 1996 - gross Government debt was a bit over 32% of GDP, and they were paying 17.15% interest on it.
Now, 20 years later, and after the run up to keep thing stable during the GFC, gross Government debt is ... a bit over 32% of GDP. In 2016 the average cost to the Government of servicing this debt was 2.26%. On this basis, it is completely sustainable.
Sure, other countries who have Govt dept:GDP ratios of 100% or more (especially in Europe) face stress issues if economies go to custard. But that is not New Zealand.
(And things are better that the stats above. They are based on gross Government debt. And that includes debt owed to itself, like the ACC, EQC, RBNZ. Inter agency debt like that is not real external debt. A book-keeping entry could wipe it out. Net Government debt is about $12 bln less.)
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