The New Zealand Debt Management Office (NZDMO), the government's debt manager, has sold NZ$100 million worth of bonds in its latest bond tender, short of the NZ$150 million worth offered.
It's the first NZDMO bond tender since Standard & Poor's downgraded the United States' sovereign credit rating to AA+ from AAA last weekend, the catalyst for mayhem in global financial markets this week. New Zealand's sovereign credit rating from S&P is also AA+.
The NZDMO offered NZ$100 million worth of bonds due to mature in April 2015 and NZ$50 million worth due for maturity in April 2023. There were just two bidders for the 2015 bonds but 11 for the 2023 bonds. The NZDMO will sell just NZ$25 million worth of 2015 bonds but NZ$75 million worth of 2023 bonds with both bidders for the former successful, and five for the latter.
There were just the NZ$25 million worth of bids submitted for the 2015 bonds and NZ$149 million worth for the 2023 bonds.
The weighted average successful yield for the 2015 bonds was 3.51% and 4.52% for the 2023 bonds. See full details of the tender results here.
1 Comments
So, can someone please explain to me why it was a smart idea to frontload debt purchases at 4+% for 15s and 5+% for the 23s when we are now paying 3.51% and 4.52% respectively? A question John Key will appreciate - frontloading debt has been one of his favourite topics.
The file for the relevant historical data at the link provided appears to be corrupt. Use this one instead:
http://www.omo.co.nz/NZDMO%20Tender%2011_12_2008.xls
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