The federal government is planning another round of ultra-long term bond issuance in a bid to lock in further low-cost funding.
The Department of Finance department said Wednesday today is planning to reopen the 50-year bond issue that it first closed earlier this year, and has already reopened once. The government initially raised $1.5 billion with its first ultra-long bond issuance back in April, and raised another $1 billion in July.
Now, it says that, subject to favourable market conditions, the 2.75% bond that matures on December 1, 2064 will be reopened using a syndicated process. The government did not say how much it hopes to raise with this latest issue.
The previous issues of these bonds have reportedly been enthusiastically received by investors, both domestic and international. From the government’s perspective, the issuance of ultra-long bonds allows it to reduce refinancing risk at a time when interest rates are exceptionally low.