Strong investor demand saw the Government raise $2 billion from its syndicated offer of May 2031 bonds, with bids exceeding $3b.

The bonds, which carry a coupon of 1.50 per cent, were issued within the Treasury's desired range, with a yield to maturity of 1.42 per cent.

"It was well attended," said one bond market participant.

"Demand was good and it suggests that New Zealand government bonds remain attractive to investors," he said.


"They have been for a long time and that remains the case," he said.

Foreign investors account for about 53 per cent of the $72b of New Zealand Government bonds on issue.

The Government's syndicated bond issues typically only happen once a year and dwarf the standard weekly bond tenders, which usually raise $50-$250 million.

The sums involved are designed to kick-start liquidity for the new issue, after which funds for that maturity are raised in the normal way through the weekly tenders.

In this instance, the Treasury said it would not issue any May 2031s before January 2020 - allowing enough time for the market to settle.

Syndication, where a group of institutions are called on to secure support for an issue, allows for significantly bigger sums to be raised than is possible through the tender process.

The Bank of New Zealand, Commonwealth Bank of Australia, UBS AG, Australia Branch and Westpac Banking Corp are joint-lead managers for the issue.