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Marketing of Commonwealth securities



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M t.

• T H E T R E A S U R Y

EMBARGO FOR IMMEDIATE RELEASE

RELEASE NO. 32

STATEMENT BY THE TREASURER, THE HON JOHN HOWARD, MP

MARKETING OF COMMONWEALTH SECURITIES

The Treasurer, the Honourable John Howard, MP, today

announced that the Australian Loan Council, following .

consideration of proposals put before it by the Commonwealth,

had agreed to changes in the present system of marketing

Treasury. Notes. It had also agreed, in principle, to .

replacement of the present system of selling Commonwealth '

Bonds with a "tap" issue, system. .

The proposed new arrangements for the issue of Treasury

Notes, when implemented, will provide for the sale of Notes

by periodic tender, through the Reserve Bank acting on

behalf of the Commonwealth. This will replace the present

system whereby Treasury Notes are available on continuous. .

issue at pr.e-determined prices. . .

The system proposed for the introduction of a "tap" issue

of Commonwealth Bonds is aimed at having three or four· .

securities available.to investors more or less continuously

throughout the year. The bonds will be offered to

investors by the Reserve Bank, acting as agent for the

Commonwealth. Loan Council will continue to determine the

maturity date and coupon rate of the three or four .

securities to be issued on tap and will from time to time .

establish limits within which the. yields on the approved .

2

issues may be varied by the Chairman without further . ,

consultation with Loan Council.

The new system will replace the past practice of issuing

new Commonwealth Bonds through periodic cash loans. ·

Certain technical aspects, including consequential changes

in arrangements governing borrowings by semi-government

and local authorities will be determined by the Loan

Council when it meets again in June 1979· . .

It is expected that these new systems will be. implemented

in the latter part of this calendar year, following

completion of necessary legal and technical processes, ·

including amendment of relevant Commonwealth legislation.

The Loan Council agreed that for the purposes of operation

of the new system it should meet at least twice a year and

that it would review the position when sufficient

experience had been gained of the operation of the new

arrangements. .

The Loan Council also had a useful general discussion of

its procedural and consultative arrangements.

Canberra, ACT .

2 April 1979