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The Coupon Interest Rate on a Treasury Indexed Bond is set when the bond is first issued by the Australian Government, and remains fixed for the life of the bond. For example, a Treasury Indexed Bond with a 4% Coupon Interest Rate will pay investors 1% of the Nominal Value every three months. These instalments are called Coupon Interest Payments.

The real Yield To Maturity is the rate of return on a Treasury Indexed Bond *above the rate of inflation* (expressed as an annual rate) if purchased at the current market price and held until the Maturity Date (the calculation of the real yield assumes all Coupon Interest Payments are reinvested at the same real rate). The yield will vary through time with changes in the price and remaining term to maturity of the bond.

Yield To Maturity will vary through time with changes in the price and remaining term to maturity of the bond. The Coupon Interest Rate is set when the bond is first issued and remains fixed for the life of the bond. As a result, the Coupon Interest Rate will usually be different from the bond’s Yield To Maturity.

If you become a holder of an *Exchange-traded Treasury Indexed Bond* (*eTIB)* and had settled the transaction at the Record Date (the close of business eight calendar days prior to the Coupon Interest Payment Date), you will be entitled to the next coupon interest payment. If this day is not a Business Day, the preceding Business Day is the Record Date.

The ex-interest settlement period for *eTIBs* is the period after the Record Date up to and including the next Coupon Interest Payment Date. Transactions settled during the ex‑interest settlement period are not entitled to the next Coupon Interest Payment.

**Example 1: ** The 3.00% 20 September 2025 Treasury Indexed Bond makes a Coupon Interest Payment on Friday, 20 December 2013. The Record Date for this Coupon Interest Payment is Thursday, 12 December 2013.

**Example 2: ** The 4.00% 20 August 2020 Treasury Indexed Bond makes a Coupon Interest Payment on Monday, 20 May 2013. The Record Date for this Coupon Interest Payment is Friday, 10 May 2013 (ten days prior to the Coupon Interest Payment Date, since the date eight days prior to the Coupon Interest Payment Date falls on a weekend).

Coupon Interest Payments for *eTIBs* are made every three months. If the Coupon Interest Payment date is not a Business Day, the payment will be made on the next Business Day. The next Coupon Interest Payment Date for a particular series of *eTIBs* is listed on the List of eTIBs page.

The Australian Government’s preferred method of payment to all investors is by direct credit into an Australian dollar bankaccount with a financial institution in Australia. Australian, United States,Great Britain, New Zealand and Canadian resident investors must nominate a valid Australian bank account, otherwise payments will be withheld until suchtime as a valid account is provided. Payments to investors that reside outside the above-mentioned jurisdictions will be made by paper cheque where a valid account has not been provided. Investors are required to supply their payment instructions no later than the Record Date in order to receive their payment.

If you are already an *eTIB *holder* *and you wish to change your payment details please contact the bond registry.

*eTIBs* make Coupon Interest Payments every three months over the life of the bond. At maturity the final Coupon Interest Payment is paid along with the Nominal Value of the bond. However, unlike *eTBs*, with *eTIBs* the dollar value of each coupon payment will change to reflect inflation as measured by changes in the Consumer Price Index (CPI). The repayment of the Nominal Value at maturity will be adjusted for inflation.

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(Actual amounts will vary depending on the individual