Section 19 - Exchange-traded Australian Government Bonds

Section 19 - Exchange-traded Australian Government Bonds

19.1 - Introduction

Australian Government Bonds are debt securities issued by the Commonwealth of Australia (Australian Government). Exchange-traded Australian Government Bonds (AGBs) offer a convenient and readily accessible way for security holders to invest in Australian Government Bonds.

The security holder of an AGB has beneficial ownership of an Australian Government Bond in the form of a CHESS Depositary Interest (CDI), refer to section 16 for further information. This means the security holder obtains all the economic benefits (including payments) attached to legal ownership of the AGB over which the CDI has been issued. Exchange-traded AGBs are defined as Government Bond Depositary Interests which are governed by Section 13 of the ASX Settlement Operating Rules.

19.2 - Exchange-traded Australian Government Bonds

There are two different types of AGBs:

  1. exchange-traded Treasury Bonds (TBs); and

  2. exchange-traded Treasury Indexed Bonds (TIBs).

The primary source of information about exchange-traded AGBs are the Information Statements provided by the Australian Government. The information statements can be downloaded from the links below:

19.3 - Unique Characteristics of exchange-traded AGBs

The Australian Government Bonds underlying exchange-traded AGBs are held in the Austraclear System on account of the Depositary Nominee. Austraclear is Australia’s settlement and depository system for the wholesale debt market.

19.4 - Security Attributes

A CHESS exception indicator value of “C” indicating that the security is a CHESS Depositary Interest (CDI) will be applied to all Exchange-traded AGB series, including long, full, abbreviated and short descriptions representing the underlying type of bond, annual coupon rate, maturity date and other information. An example of which is provided in the table below.

Long Description

TREASURY BOND 5.75% 15-05-21 SEMI

Full Description

TREASURY BOND 5.75% 15-05-21 SEMI

Abbreviated Description

TB 5.75% 05-21 6M

Short Description

GVM6WU

19.4.1 - ASX Code Convention

To distinguish exchange-traded AGBs, a separate six character ASX coding convention will be applied. The following are the coding convention elements:

Characters

Details

First two characters

GS

Third character

  • B for fixed coupon

  • I for Index

Fourth character

Represents the month of maturity

Fifth and sixth characters

Represent the year of maturity and will be numeric e.g. 2018 will be represented as 18.

19.5 - Coupon Interest Payments

AGBs follow the standard two business day ex-period regime. If the coupon interest payment date is not a business day, payment will be made on the next business day.

CHESS cum-entitlement balances are created in the normal course and CHESS will perform diary adjustments to failed T+2 cum-interest settlement obligations at record date in respect of coupon interest payments only.

Refer to section 10.2 for further details on diary adjustment processing.

19.6 - Maturity

Cessation of trading for a maturing AGB will occur at close of trading five business days prior to the final coupon and maturity record date.

Repayment of the face value of exchange-traded AGBs will occur outside of CHESS on the maturity date in accordance with the payment date convention, and the CHESS subregister will be closed. Refer to section 10.6 for further details.

Diary adjustments will not be performed in relation to any final redemption value involving maturity proceeds.

19.6.1 - Close of CHESS Subregister

The CHESS subregister will be closed at end of day one business day prior maturity date.

The following timetable and events will apply to maturing AGBs:

Event

Business Day

Quotation of AGBs ends at close of trading five business days before coupon/maturity record date

0

Record date (coupon and maturity)

5

CHESS diary adjustment processing (coupon only)

6

CHESS subregister is closed at end of day one business day prior maturity date

 

CHESS holdings removed by Government Bond Issuer on coupon/maturity date

 

19.7 - Investor Information Statements and Terms and Conditions

Investor information statements for exchange-traded Treasury Bonds and exchange-traded Treasury Indexed Bonds, including the full terms and conditions of the underlying Treasury Bonds or Treasury Indexed Bonds, are available at the Australian Government Bonds Website.

The key terms for each specific series of underlying Treasury Bond or Treasury Indexed Bond are detailed in the relevant Term Sheet which are also available at the Australian Government Bonds Website.

 

19.8 - Conversion by Australian Government

The Australian Government may at any time, subject to a minimum period of three months’ notice, convert holdings of exchange-traded AGBs to the underlying Treasury Bonds or Treasury Indexed Bonds directly registered in the Commonwealth Stock Registry. If this occurred security holders would continue to receive the same Coupon Interest Payments and face value amounts they were entitled to with the exchange-traded AGBs but would not be able to sell their investment in Treasury Bonds on the ASX.

 

 

The following macros are not currently supported in the footer:
  • style