The UBS Australia Composite Bond Index, Australia's benchmark bond indices, will lengthen by a record 0.23 year on the night of the 15 November 2006 based on record bond redemptions of A$12.9 billion and coupon flows of A$1.2 billion.

The UBS Composite Bond Index currently has a duration of 3.41 years which will increase to 3.64 years. Within the UBS Composite Bond Index, the largest lengthening will affect the UBS Treasury Index which lengthens by 0.56 years to 4.52 years based on the maturity of the A$6.1billion CGL 6.75% 15 November 2006.

UBS has estimated that based on a current market value capitalisation of A$213 billion, the 0.23 year duration lengthening is the equivalent of approximately 63,500 10yr futures duration.

According to Simon Maidment, Head of Fixed Income, UBS Investment Bank, month to date fixed rate issuance of A$4.5billion is at a near record pace and would be expected to cause a further lengthening in the index when the new issues are included in the index from 1 December 2006. "Investors benchmarking against the index may need to amend their holdings to remain consistent with index returns," said Maidment.

In addition to the UBS Composite Bond Index, which measures fixed rate outstandings, the UBS Credit FRN Index sees maturities of A$1.2 billion on 15 November 2006. Month to date floating rate issuance in November has been A$2.0 billion.

The UBS Australia Bond Indices are the market leading benchmark for performance measurement in the Australian fixed income market. UBS Investment Bank created the indices in 1988 and has developed the indices over many years to reflect the changing nature of the Australian debt markets.