Advisory Note: Update to New Zealand Government Inflation-Indexed Bond Tender Operating Rules and Guidelines

As announced alongside the Half-Year Economic and Fiscal update, the Treasury plans to move to a single price auction mechanism for Inflation-Indexed bonds (IIB) and a more flexible approach to IIB tender issuance.

To reflect the move to a single price auction mechanism for New Zealand Government Inflation-Indexed Bond (IIB) tenders, the Treasury has updated its Operating Rules and Guidelines. Specifically, sections 3.2 – Format of Bids (or Offers) and 3.7 Allocations – Issuance.

IIB tenders are expected to resume from March 2022. Operational details supporting a more flexible approach to IIB tender issuance include:

• Subject to demand and market conditions, two IIB tenders will be scheduled most months. The scheduled IIB tender dates will be published within the monthly New Zealand Government Bond Tender Schedule.
• Market participants will be surveyed the Monday prior to a scheduled IIB tender. The information received will contribute to the decision to hold that tender, and the volume and the IIB maturity date(s) to be offered.
• IIB tender details will be announced on the Wednesday prior to the Thursday tender, and held alongside nominal bond tenders on Thursdays at 2pm.