In conjunction with the Half Year Economic and Fiscal Update, the New Zealand Debt Management Office (NZDMO) has announced that the 2012/13 domestic bond programme will increase by $500 million to $14 billion from the $13.5 billion programme announced at Budget 2012.
Compared with the same period as Budget 2012, the domestic bond programme is forecast to rise by $6.5 billion. The inclusion of the 2016/17 year in the forecast period will add a further $7 billion to the bond programme due to pre-funding of the December 2017 bond maturity.
NZDMO will offer $200 million of nominal bonds in each of the tenders in the quarter ending 31 March 2013. The tender schedule for this quarter will be released shortly.
In the near term, Treasury bill outstandings are not expected to be reduced further from what was forecast at Budget 2012.
|HYEFU 2012 $ billion||2012/13||2013/14||2014/15||2015/16||Cumulative||2016/17|
|Gross bond issuance||14.0||10.0||10.0||7.0||41.0||7.0|
|Change in Treasury bill outstandings||-4.0||0.0||0.0||0.0||-4.0||0.0|
|Gross borrowing programme||10.0||10.0||10.0||7.0||37.0||7.0|
|Change from Budget 2012 $billion||2012/13||2013/14||2014/15||2015/16||Cumulative||2016/17|
|Gross borrowing programme||0.5||0.0||2.0||4.0||6.5||N/A|
The NZDMO also announced that it will launch a mid-curve bond in the near future. The maturity date of the bond is likely to be April 2020. The NZDMO intends to consult with financial intermediaries on the launch of the bond shortly.
NZDMO also announced further details of its inflation-indexed bond ("IIB") programme:
- Tenders will commence on 7 February 2013 and will be held on the first Thursday of each month.
- No nominal bond tenders will be held in the week that IIB tenders are held.
- For the remainder of the fiscal year, NZDMO will offer $200 million of the September 2025 bond in each tender.
- Tenders will be offered on a multi-price basis (ie, the same basis as nominal bond tenders).
- Maximum tranche size is set at $6 billion.
- Over time, IIB outstandings are expected to reach 10%-20% of Government bond outstandings.
Brendon Doyle | Treasurer
Tel: +64 4 917 6133
Andrew Hagan | Acting Head of Portfolio Management
Tel: +64 4 917 6073