The promise of a Commonwealth government guarantee on QTC's 10-year bond issue attracted a lot of investor interest last week and allowed QTC to price the new bond line at 84 basis points over Commonwealth bonds through a bookbuild process. Demand for the QTC bond may have tempered demand for Commonwealth debt.With a higher yield for the same credit risk there's a reason to move money around.The day before QTC's ten-year bond issue, AOFM was auctioning A$700 million of March 2019 CGS and only managed to attract oversubscriptions of 1.8 times, the lowest level yet in the current series of auctions. The weighted average yield on the bonds came in at 5.44 per cent, compared with 5.35 per cent when last auctioned on May 27.AOFM fared little better on Friday when it attracted oversubscriptions of only 1.9 times for A$700 million of April 2012 CGS, at a weighted average yield of 4.53 per cent, compared with 3.98 per cent when last auctioned on May 29. The risk for the Commonwealth government is that all the guarantees it is providing to other issuers are going to crowd its own bonds out of the market.To the extent that the government finds itself competing against the states that it has guaranteed, it will at least know who is not buying its bonds, now that AOFM will be keeping a register of the beneficial owners of CGS and guaranteed state government bonds.