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 0.7030 0.0020 0.29%
AUD 0.9406 0.0027 0.29%
EUR 0.6282 0.0013 0.21%
GBP 0.5429 0.0019 0.35%
HKD 5.4748 0.0160 0.29%
JPY 78.7000 0.2390 0.30%

Commods

Commodity Price Change Time
Gold Index 1255.5 -9.660 2017-05-23T00:
Oil Brent 54.4 0.260 2017-05-23T00:
Oil Nymex 51.5 0.340 2017-05-23T00:
Silver Index 17.1 -0.050 2017-05-23T00:

Indices

Symbol Open High Last %
NZX 50 7386.0 7421.8 7384.7 0.50%
NASDAQ 6154.2 6154.2 6138.7 0.14%
DAX 12631.4 12662.0 12659.1 -0.13%
DJI 20949.2 20983.9 20937.9 0.20%
FTSE 7485.3 7519.6 7485.3 0.40%
HKSE 25382.3 25428.5 25403.2 0.10%
NI225 19777.6 19782.8 19613.3 0.66%
ASX 5760.2 5776.0 5760.2 0.15%