The AGBs, now able to be bought and sold as easily as shares, are “fixed income, interest rate investments that provide a regular income stream and the opportunity for the investor to receive the investment’s face value at maturity,” the ASX said.
Exchange-traded AGBs will be quoted and transacted on the ASX in a similar manner to shares, with each bond quoted as a gross price (capital plus accrued interest) and with a face value of $100.00.
The launch will increase the amount of ASX-quoted assets for retail investors in the interest rate category from $35 billion to approximately $280 billion, according to the ASX.
Elmer Funke Kupper, ASX managing director and CEO, said a retail government bond market will allow retail investors to diversify their savings and provide an important foundation for the development of a corporate bond market.
Investors in exchange-traded AGBs will hold beneficial ownership of the Australian Government Bonds in the form of CHESS Depositary Interests (CDIs). Trades in exchange-traded AGBs will be cleared by ASX Clear and settled through CHESS, the ASX said.
The ASX has appointed Commonwealth Bank of Australia, JP Morgan Australia Limited and UBS AG, Australia Branch to provide continuous two-way pricing in all bond series.
