Stock tender surprise
The size of the February Government stock tender has been set at $4OO million, somewhat higher than money market dealers expected. The tender was included in the Government borrowing programme to help offset refinancing by the Reserve Bank of a Meat Board annual debt estimated at $350 million. Dealers said ■ yesterday that they had expected the tender, to be held on Thursday, would be no more than $3OO million because of a big January tender, of $4OO million, which was revised upwards from a statement in December on the borrowing programme for the remainder of the year to March 31.
The Minister of Finance, Mr Douglas, said borrowing would now raise $2930 million, in 11 tenders during the year. Mr Douglas indicated that the February tender also reflected a fiscal deficit that would turn out to be higher than his earlier forecast. Next week’s tender will include stocks of three terms: SIOOM of September, 1989, stock, SISOM of June, 1991, stock and SISOM of July, 1994, stock.
Rates on the secondary market firmed after the announcement of the tender. The 1991 stock, that in which most trading is now being done, opened at 19.1 per cent and jumped as high as 19.55 per cent after the announcement. It closed at 19.35 per cent. The higher than expected size of the tender is expected to keep pressure on the rates.
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Press, 8 February 1986, Page 3
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232Stock tender surprise Press, 8 February 1986, Page 3
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