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SYDNEY, Jan 1 Asia Pulse - Calendar 2003 has been dubbed an outstanding year for Australian corporate bonds, with attractive spreads, underpinned by ongoing investor demand, boosting issuance.
The Commonwealth bond market survived a near-death experience in 2003 before the federal government shelved plans to scrap it, but it still took a back seat to stellar corporate bonds.
Government bonds, however, have not faded alongside burgeoning interest in corporate issuance.
At one stage, the government bond market faced the prospect of fading after the federal government released a discussion paper on future options for it.
However in September, Treasurer Peter Costello reaffirmed the government would maintain some government bonds in the market as a benchmark for financial markets, despite a fall in net debt.
He shelved the proposal to scrap the Commonwealth bond market, on the grounds it could have pushed up interest rates.
Commonwealth Securities senior analyst Craig James said government bond yields had experienced a reversal of fortunes.