Government debt management
The government borrows in the debt market by issuing Treasury bills and government bonds. Treasury bills have a maturity of up to one year and are issued as zero-coupon notes. Government bonds have an original maturity of more than one year, bearing a fixed-rate coupon paid once a year. All Treasury bills and government bonds are issued in NOK and are listed on the Oslo Stock Exchange.
The primary objective of public debt management is to fulfill the government's financing needs at the lowest possible cost and promote an efficient and well functioning domestic securities market.
The government borrowing strategy is defined at quarterly meetings with the Ministry of Finance. The final decision is made by the Ministry of Finance. At the December meeting, an auction calendar is drawn up for the issuance of bills and bonds in the coming year. At the subsequent quarterly meetings, any further specification and adjustments are decided.
Long-term government loans are raised by increasing existing loans. In addition, a new government bond with a maturity of 11 years is normally launched every other year. The government thus has five or six government bonds outstanding in the market, maturing every other year. For borrowing to be as evenly spread as possible, the government normally borrows more than its financing needs in years without maturity.
Treasury bills are launched on International Money Market (IMM) dates. The bills mature on IMM dates the same month in the following year. The IMM dates are the third Wednesday in March, June, September and December. These days are widely used as maturity and issue dates in the money market. The IMM dates are also used for rolling over Treasury bills in connection with the swap arrangement. The auctions held in-between the IMM dates are used to increase loan volumes in existing series.
Norwegian government debt is issued by auction on the Oslo Stock Exchange. The loan volume and the loan series in which it is to be issued are announced three business days prior to the auction. Investors can purchase government securities by submitting bids to one of the banks that has entered into a primary dealer agreement with the government. The main function of primary dealers is to promote liquidity in the Norwegian government securities market by quoting bid and offer prices for each government security on the Oslo Stock Exchange. The terms of the agreement are set out in the Primary Dealer Agreement. Under the Primary Dealer Agreement, primary dealers are permitted to enter into repurchase agreements and reverse repurchase agreements in all outstanding government securities.
(13.mai 2013 11:05)
RESULT OF UNIFORM PRICE AUCTION 13 MAY 2013
IN TREASURY BILL ISIN NO 0010673320 (NST 22):
ALLOTMENT PRICE: 98.7080
YIELD: 1.55 %
ALLOTED VOLUME: NOK 4 000 M.
BIDS HIGHER THAN LOWEST ACCEPTED BID: NOK 3 445 M.
TOTAL VOLUME OF BIDS: NOK 10 695 M.
56 PERCENT ALLOTMENT ON LOWEST ACCEPTED BIDS.
(14.mai 2013 11:05)
RESULT OF AUCTION 14 MAY 2013 IN NST 472:
ALLOTMENT PRICE: 111.0200
YIELD: 1.39 % P.A.
ALLOTED VOLUME: NOK 3 000 M.
BIDS HIGHER THAN LOWEST ACCEPTED BID: NOK 2 905 M.
TOTAL VOLUME OF BIDS: NOK 6 905 M.
48 PERCENT ALLOTMENT ON LOWEST ACCEPTED BIDS.