Australian inflation market boosted by linker issuance
The restoration of central government linker issuance has provided much-needed support for Australia’s inflation market. But it has also presented challenges for quasi-government issuance. And a lack of ambition among private-sector participants means demand for customised derivatives has proven limited. Georgina Lee reports
The Australian government resumed issuance of Treasury-indexed bonds, or linkers, in 2009 after six years of absence from the market. The Australian Office of Financial Management (AOFM) issued A$4 billion ($3.7 billion) of linkers maturing in 2025. The issue size was surprisingly large, with supply four times as much as the market had expected.
By the end of this fiscal year (June 30), the AOFM will have issued a total of A$5.5 billion–6 billion of Treasury-indexed bonds. And the market is
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