New Zealand sets guidance for May 2028 government bond

Credit: REUTERS/THOMAS WHITE

The New Zealand Treasury (Aaa/AA+/AA+) has set initial guidance at 13bp–17bp over the April 15 2027s for a NZ$2bn–$4bn (US$1.34bn–$2.68bn) syndicated sale of new May 15 2028 nominal bonds that will price tomorrow.

MELBOURNE, October 27 (IFR) - The New Zealand Treasury (Aaa/AA+/AA+) has set initial guidance at 13bp–17bp over the April 15 2027s for a NZ$2bn–$4bn (US$1.34bn–$2.68bn) syndicated sale of new May 15 2028 nominal bonds that will price tomorrow. ANZ, BNZ, UBS and Westpac are joint lead managers.

This is the Treasury's fifth syndicated jumbo bond sale since the start of the coronavirus pandemic, having raised a combined NZ$19bn  from the previous four.

These comprised a NZ$3.5bn tap of the 1.5% May 15 2031s on April 9, a record NZ$7bn sale of new 0.5% May 15 2024s on June 16, a NZ$4.5bn print of new 1.75% May 15 2041s on July 14, and a NZ$4bn tap of the 4.5% April 15 2027s on August 25.

Demand has been fuelled by the Large Scale Asset Purchase programme, under which the Reserve Bank can buy up to NZ$100bn of sovereign and local government paper in the secondary market by June 2022. This frees up funds to participate in new benchmarks.

International investors have been comforted by New Zealand’s still strong relative credit position, celebrated handling of Covid-19, and the highest absolute yields among its Triple A and Double A rated sovereign peers.

In September, the New Zealand Treasury reduced its gross bond supply forecast for fiscal-year 2020/21 by NZ$10bn versus the previous update in May, to NZ$50bn.

(Reporting by John Weavers; Editing by Vincent Baby)

((john.weavers@refinitiv.com; +0434 600 950))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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