Issuance in 2004-05 and 2005-06
The debt issuance programme is directed at maintaining liquid and efficient Treasury bond and Treasury bond futures markets. Accordingly, the volume and timing of Treasury bond issuance takes account of the need to have an appropriate range of Treasury bonds available for inclusion in Treasury bond futures baskets. The programme is moving towards a pattern where new 5-year and 13-year Treasury bonds are launched in alternate years, with total issuance over two years of around $5 billion in each line.
In 2004-05, two new stocks were launched — the February 2017 and August 2010 Treasury bonds. The volumes currently on issue are $3.2 billion for the February 2017 Treasury bond and $2.6 billion for the August 2010 Treasury bond. It is intended to issue a further $600 million of the August 2010 Treasury bond in the period remaining to 30 June 2005.
In the first half of 2005-06, issuance will be focused on the February 2017 Treasury bond and the August 2010 Treasury bond to support the operation of the 3-year and 10-year Treasury bond futures contracts. Additional stock will be issued to bring the total volume on issue for each of these bond lines to $5 billion by December 2005.
In early 2006 a new 13-year Treasury bond, a March 2019 bond, will be issued to support the operation of the 10-year Treasury bond futures contract. It is planned to issue $2.6 billion of this new 13-year Treasury bond during 2005-06. The remaining issuance necessary to bring this bond line up to $5 billion will be undertaken in the first half of 2006-07.
Total Treasury bond issuance during 2005-06 will be $6.2 billion, while scheduled maturities during this period, net of Australian Government holdings, are $6.7 billion. As a result, the total stock of Treasury bonds on issue, net of Australian Government holdings, will be around $48 billion at 30 June 2006.
Treasury notes may need to be issued during the financial year to meet within year financing requirements. The magnitude of this issuance will depend on the size and timing of the transfer of assets to the Future Fund.
Chart 3: Benchmark Treasury bonds outstanding
expected at 30 June 2006(a)
- Treasury bonds on issue are net of Australian Government holdings. The October 2007 Treasury bond is excluded from the chart as it is not considered a benchmark bond line.
Note: The dark grey columns represent bonds outstanding at the beginning of the 2005-06 financial year. The light grey columns indicate new issuance in 2005-06.
Source: Australian Office of Financial Management and Treasury estimates.