NSW State Government Waratah Bonds
The state of New South Wales began offering retail bonds to the public in August 2011. Called Waratah Bonds (the waratah being the state flower), they are available directly from the State Treasury Corporation (TCorp) and are guaranteed in full by the State Government which is a AAA rated borrower.
Waratah Bonds are sold in amounts from A$10,000 up to a maximum of $1 million (or more with TCorp approval). The bonds were originally available in two maturities:
- 3 years, maturing 1 September 2014
- 10 years, maturing 1 September 2021.
The 10 year bonds stopped being offered in 2015. Now, the NSW government offers 3 year and 4 year maturities. The 4 year year Waratah Bond is designed for Business Innovation and Investment visa investors.
The bonds pay a fixed coupon rate on a semi-annual basis. The rate, and therefore the price, varies daily. On the first day of issue (29 August 2011) the rates were 4.25% for the 3 year bonds, and 5.10% for the 10 year bonds. These rates are slightly higher than the equivalent tenor Commonwealth Government bonds.
Since then, fixed rates have been lower. The 3 year bond maturing in September 2020 has a coupon rate of 1.75%.
Waratah bonds are not listed on any exchange. Investors will be able to sell them back to TCorp at daily published prices.