SYDNEY, May 11 (Reuters) - Offshore holdings of Australian sovereign bonds have hit the lowest in eight years, data from the national funding agency showed on Thursday, with the government forecasting total debt on issue to balloon to A$725 billion ($532 billion) by 2028.
About 54 percent of Australia's outstanding debt of A$490 billion is held by international investors, from a peak of around 80 percent in 2011, data showed.
Asia, including Japan, is the largest holder of the nation's total debt, the agency said, without providing more details.
"Offshore investors continue to be net buyers but the pace has not kept up with our bond supply," said a spokesman at the Australian Office of Financial Management (AOFM), noting a smaller funding programme in the fiscal year starting July.
Gross issuance of government debt in 2017/18 will be about A$80 billion and after accounting for maturities and buybacks, the net issuance will amount to A$34 billion.
This is down from A$92 billion of gross debt issued so far this financial year.
The AOFM said it plans to launch new maturities of November 2022 and 2029 in the next financial year and a May 2041 early 2018/19.
Weekly bond tenders of around A$1.4 billion will be maintained next financial year.
Australia is among the 10 countries that are still rated triple A by all three major agencies, but slower economic growth in recent years and a stubborn fiscal deficit have jeopardised its top ranking.
On Tuesday, Australia's conservative government pledged a return to surplus in four years.
S&P Global Ratings, which put the sovereign on negative watch last July citing weakened prospects for improvement in budgetary performance, has yet to comment.
Moody's and Fitch said the budget had no major impact on the country's triple A ratings with stable outlook. ($1 = 1.3613 Australian dollars)