By Cecile Lefort
SYDNEY, May 4 (Reuters) - Australia plans record debt sales of A$90 billion ($67 billion) in the 2016-17 fiscal year, it said on Wednesday, as the nation ramps up borrowing to offset a fall in revenue from the slump in commodity prices.
While the planned debt issuance increase, announced the day after the government released its federal budget, is only slightly higher than the A$86 billion for the current fiscal year ending June, it will be welcomed by investors who can't seem to get enough of the top-rated paper.
With bond yields hovering between 1.7 percent AU10YT=RR and 2.4 percent AU10YT=RR , such returns are considered sumptuous compared with the sub-zero rates in Europe and more recently Japan.
"Given it is such an attractive investment, a few more bonds won't change much," said James Alexander, head of fixed income at Nikko Asset Management in Sydney.
He said even though the Reserve Bank of Australia (RBA) cut interest rates to a record low of 1.75 percent earlier this week, bond yields are still alluring.
"The reason why investors from fund managers to central banks choose Australia is because it is a highly rated country and the economy has been performing well," Alexander added. Nikko manages A$11 billion in fixed income.
Around 65 percent of Australia's A$422 billion total debt is held by foreign investors, Commonwealth Bank of Australia data shows.
Australia is one of just 10 countries with a triple-A rated credit rating and a stable outlook from all three major ratings agencies.
Also helping is the country's relatively low debt by international standards. The government forecasts net debt to peak at 19.2 percent of the gross domestic product by 2019, well below current debt ratios in the U.S., Japan and Germany. ($1 = 1.3328 Australian dollars)