Strong demand for NZ inflation indexed bonds

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 February 15, 2016, bonds. The DMO suspended issues of that issue in 1999.

(BusinessDesk)


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

Comments & Questions

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.6993 -0.0041 -0.58%
AUD 0.9234 0.0055 0.60%
EUR 0.6040 -0.0061 -1.00%
GBP 0.4763 -0.0034 -0.71%
HKD 5.4280 -0.0301 -0.55%
JPY 73.8610 -1.0050 -1.34%

Commods

Commodity Price Change Time
Gold Index 1291.3 -1.380 2016-05-02T00:
Oil Brent 46.2 0.730 2016-05-02T00:
Oil Nymex 45.5 -1.210 2016-05-02T00:
Silver Index 17.7 -0.139 2016-05-02T00:

Indices

Symbol Open High Last %
NZX 50 6791.8 6844.5 6791.8 0.75%
NASDAQ 4786.6 4821.6 4775.4 0.88%
DAX 10052.5 10062.0 10123.3 -1.87%
DJI 17783.8 17912.3 17773.6 0.66%
FTSE 6241.9 6270.0 6241.9 -1.25%
HKSE 21061.8 21061.8 21067.0 -1.85%
NI225 16357.1 16357.1 16666.0 -3.11%