Strong demand for inflation linked bonds in 1st sale of 2013

Article – BusinessDesk

Feb. 8 (BusinessDesk) Investors offered to buy more than six times the amount of inflation-indexed bonds on offer in the New Zealand Debt Management Offices first sale of the securities this year.

Strong demand for NZ inflation indexed bonds in first sale of 2013

Feb. 8 (BusinessDesk) – Investors offered to buy more than six times the amount of inflation-indexed bonds on offer in the New Zealand Debt Management Office’s first sale of the securities this year.

The government sold $200 million of the September 2025 bonds, which are adjusted for movements in the consumer price index, at a weighted average yield of 1.5014 percent. It received 64 bids totalling $1.3 billion, a coverage ratio of 6.51 times.

The resumption of sales of so-called linkers was announced last year with an initial sale of $2.5 billion of the debt in October via a syndicate of ANZ New Zealand, Deutsche Bank and UBS, with HSBC and the Royal Bank of Scotland as co-managers. That sale garnered $4 billion of bids.

The DMO plans to sell as much of $6 billion of the debt and inflation index bonds are expected to reach 10 percent to 20 percent of total government bonds outstanding.

Inflation-indexed bonds were originally introduced in 1996, with the sale of Feb. 15, 2016, bonds. The DMO suspended issues of that issue in 1999.

(BusinessDesk)

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