(Bloomberg) -- New Zealand’s sale of four-year bonds missed its indicative target, the second time an auction has been under-subscribed across any tenor since 2012. 

The country sold NZ$188 million ($119 million) of notes maturing April 2027, below its NZ$200 million target, according to New Zealand Debt Management. It’s only the second under-subscription since 2012, following the Dec. 1 auction of April 2033 notes that missed the target. 

The poor result comes as traders anticipate New Zealand’s economy will head into recession as the nation’s central bank continues its aggressive rate hikes to tame the worst inflation pressures in a generation. The four-year notes “looked pretty expensive” given the yield-curve inversion and competing with other issuance in New Zealand, said David Croy, a strategist at Australia & New Zealand Banking Group in Wellington. 

“While I do think it mostly reflects slight richness in that particular bond and a specific set of market conditions today, I do think it looks more like an isolated incident and not something systemic, even if it’s the second time in around two months that one line of bonds hasn’t been fully alloted at tender,” he said. “I think most in the market will be watching closely to see that this doesn’t happen again in coming weeks and months.” 

Meanwhile, a single bidder scooped up all NZ$50 million of May 2051 bonds on sale with a yield 4.3 basis points below secondary market levels. There was also solid demand for New Zealand’s green bond maturing in May 2034, its first primary tender since the line was issued last year, selling with a weighted average yield 0.5 basis points below market levels.

--With assistance from Masaki Kondo and Garfield Reynolds.

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