Government bond rate and yields

The Reserve Bank of Australia (RBA) operates an "over the counter" market for Australian Commonwealth government bonds called the Small Investor Bond Facility. This facility lets any investor, including non-Australian investors, buy (or sell) between $1,000 and $250,000 worth of government bonds. The RBA publishes a daily buy and sell price for these bonds, although bond prices can change during the trading day. You should check current prices before deciding to buy or sell.
 
From 21 May 2013 the Australian Securities Exchange (ASX) will let you buy and sell Commonwealth Government Securities (or CGS) on the market. 
 
The bond prices and yields in the table below are historical prices for the dates noted. Yields are a percentage yield to maturity (see explanation on this page), and prices are in A$ per $100 of face value (for example, a price of $99.00 is a 1% discount to face value).

Australian government bond prices and yields 9 May 2013

by Editor on May 9, 2013 0 Comments

The Reserve Bank lowered the official cash rate to 2.75% at its meeting on Tuesday. This is a record low for the cash rate, and Australian Government bond rates also fell as a result. Yields on 2 and 3 year bonds indicate the market expects further cuts to the cash rate from here.

Fixed Coupon Bond Series
You buy at
You sell at
Type
No.
Coupon
Maturity
Price
Yield %
Price
Yield %
TB
118
6.50%
15 May 13
99.955
2.710
99.954
2.810
TB
129
5.50%
15 Dec 13
103.969
2.500
103.908
2.600
TB
125
6.25%
15 Jun 14
106.626
2.420
106.514
2.520
TB
131
4.50%
21 Oct 14
103.182
2.410
103.038
2.510
TB
119
6.25%
15 Apr 15
107.613
2.415
107.417
2.515
TB
134
4.75%
21 Oct 15
105.720
2.430
105.476
2.530
TB
130
4.75%
15 Jun 16
108.642
2.475
108.334
2.575
TB
120
6.00%
15 Feb 17
113.834
2.515
113.451
2.615
TB
135
4.25%
21 Jul 17
107.915
2.570
107.505
2.670
TB
132
5.50%
21 Jan 18
114.157
2.650
113.688
2.750
TB
122
5.25%
15 Mar 19
114.149
2.760
113.572
2.860
TB
126
4.50%
15 Apr 20
110.444
2.875
109.785
2.975
TB
124
5.75%
15 May 21
119.608
2.970
118.823
3.070
TB
128
5.75%
15 Jul 22
123.427
3.035
122.536
3.135
TB
133
5.50%
21 Apr 23
120.874
3.080
119.926
3.180
TB
137
2.75%
21 Apr 24
96.274
3.170
95.380
3.270
TB
136
4.75%
21 Apr 27
115.010
3.410
113.818
3.510
TB
138
3.25%
21 Apr 29
96.292
3.570
95.121
3.670

Australian bond prices and yields 6 March 2013

by Editor on March 5, 2013 0 Comments

The RBA has kept the official cash rate stable at 3.0% at its latest March meeting. With signs of an improving economy and potentially less need to cut rates much from where they are now, yields on 10 year government bonds have edged up.

Fixed Coupon Bond Series
You buy at
You sell at
Type
No.
Coupon
Maturity
Price
Yield %
Price
Yield %
TB
118
6.50%
15 May 13
102.683
2.880
102.663
2.980
TB
129
5.50%
15 Dec 13
103.340
2.725
103.262
2.825
TB
125
6.25%
15 Jun 14
105.840
2.680
105.711
2.780
TB
131
4.50%
21 Oct 14
104.524
2.700
104.363
2.800
TB
119
6.25%
15 Apr 15
109.625
2.720
109.413
2.820
TB
134
4.75%
21 Oct 15
106.845
2.735
106.586
2.835
TB
130
4.75%
15 Jun 16
107.200
2.775
106.878
2.875
TB
120
6.00%
15 Feb 17
112.134
2.815
111.738
2.915
TB
135
4.25%
21 Jul 17
106.154
2.870
105.733
2.970
TB
132
5.50%
21 Jan 18
112.269
2.930
111.788
3.030
TB
122
5.25%
15 Mar 19
114.694
3.020
114.110
3.120
TB
126
4.50%
15 Apr 20
110.558
3.110
109.895
3.210
TB
124
5.75%
15 May 21
119.930
3.210
119.143
3.310
TB
128
5.75%
15 Jul 22
120.473
3.290
119.586
3.390
TB
133
5.50%
21 Apr 23
120.480
3.340
119.540
3.440
TB
137
2.75%
21 Apr 24
94.559
3.455
93.681
3.555
TB
136
4.75%
21 Apr 27
113.125
3.710
111.966
3.810

Australian bond prices and yields 24 October 2012

by Editor on October 24, 2012 0 Comments
After holding the cash rate steady for three months, the RBA cut rates by 0.25% in October to get back near to the lows of the GFC.  Despite this, 10 year Australian government bond yields slightly above 3% and off all time lows earlier this year. Full prices are below.
 
Fixed Coupon Bond Series
You buy at
You sell at
Type
No.
Coupon
Maturity
Price
Yield %
Price
Yield %
TB
127
4.75%
15 Nov 12
102.179
3.190
102.172
3.290
TB
118
6.50%
15 May 13
104.883
2.830
104.827
2.930
TB
129
5.50%
15 Dec 13
105.133
2.665
105.019
2.765
TB
125
6.25%
15 Jun 14
108.063
2.600
107.897
2.700
TB
131
4.50%
21 Oct 14
103.781
2.560
103.583
2.660
TB
119
6.25%
15 Apr 15
108.975
2.550
108.724
2.650
TB
134
4.75%
21 Oct 15
106.323
2.555
106.026
2.655
TB
130
4.75%
15 Jun 16
109.267
2.560
108.906
2.660
TB
120
6.00%
15 Feb 17
115.024
2.575
114.587
2.675
TB
135
4.25%
21 Jul 17
108.179
2.650
107.720
2.750
TB
132
5.50%
21 Jan 18
114.937
2.715
114.416
2.815
TB
122
5.25%
15 Mar 19
114.874
2.790
114.247
2.890
TB
126
4.50%
15 Apr 20
110.794
2.900
110.088
3.000
TB
124
5.75%
15 May 21
123.196
2.995
122.360
3.095
TB
128
5.75%
15 Jul 22
123.818
3.085
122.880
3.185
TB
133
5.50%
21 Apr 23
120.852
3.155
119.863
3.255
TB
137
2.75%
21 Apr 24
95.028
3.275
94.110
3.375
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Why is it called a coupon?

Because bond certificates used to have little coupons attached, which the holder had to cut out and send in to receive payment!

Bond certificate with coupons attached

Coupon rate and bond yield

The coupon rate is the annual percentage interest rate on the face value of the bond. For example, a bond with $1000 face value and a coupon of 5% will pay a coupon of $50 per year.
 
The yield is a different calculation as it is based on the purchase price of the bond, not the face value. The yield on a fixed coupon bond could therefore change every day as the market price changes. If the purchase price is exactly the same as the face value, then the yield will be the same as the coupon rate.
 
The yield to maturity also factors in the capital gain (called the "premium") that a bond holder will receive on maturity of the bond if it is bought at less than face value, and the capital loss (called the "discount") if the bond is bought for more than face value. The yield quoted by the RBA in the table at the left assumes, in addition, that the coupon payments are reinvested at the same rate as the yield to maturity.
 
What's the difference?
If you are buying a government bond, focus on the yield as the overall investment return. But don't ignore the coupon, because it tells you what you will actually receive in regular cash payments until maturity. Fixed coupon bonds pay interest 6 monthly, and capital indexed bonds pay every 3 months.