The New Zealand Government’s 2008/09 domestic bond programme will increase by $500 million to a maximum of $4.5 billion, the New Zealand Debt Management Office (NZDMO) announced today.
Consistent with updated fiscal forecasts in the December Economic and Fiscal Update, the programme is projected to increase to $7.5 billion in 2009/10, $11.2 billion in 2010/11, $15.0 billion in 2011/12 and $15.9 billion in 2012/13.
Bond Market Liquidity
The NZDMO remains committed to increasing bond market liquidity and will introduce the following new measures:
- increasing the target size of each bond maturity from $4.5 billion to $5 billion;
- introducing a new long-term bond following consultation with market participants, and
- moving to weekly bond tenders from 15 January 2009.
Coinciding with the move to weekly tenders, the NZDMO will announce the composition of each tender at 11:30 a.m. on the day prior to the tender rather than two days prior as is the current practice.
With the introduction of weekly tenders, it is anticipated that tap tenders will be needed less frequently going forward.
We expect to introduce reverse tap tenders prior to the maturity of the July 2009 bond.
Regular Bond Tender Schedule – January to March 2009
Tenders are to be held weekly on any Thursday that is a business day except when the Reserve Bank of New Zealand makes its scheduled Official Cash Rate (OCR) announcements. On these days, tenders will be held on the following business day.
| Announcement Date | Tender Date | Settlement Date |
|---|---|---|
| 14-Jan-2009 | 15-Jan-2009 | 20-Jan-2009 |
| 21-Jan-2009 | 22-Jan-2009 | 27-Jan-2009 |
| 29-Jan-2009 | 30-Jan-2009* | 04-Feb-2009 |
| 04-Feb-2009 | 05-Feb-2009 | 10-Feb-2009 |
| 11-Feb-2009 | 12-Feb-2009 | 17-Feb-2009 |
| 18-Feb-2009 | 19-Feb-2009 | 24-Feb-2009 |
| 25-Feb-2009 | 26-Feb-2009 | 03-Mar-2009 |
| 04-Mar-2009 | 05-Mar-2009 | 10-Mar-2009 |
| 12-Mar-2009 | 13-Mar-2009 | 18-Mar-2009 |
| 18-Mar-2009 | 19-Mar-2009 | 24-Mar-2009 |
| 25-Mar-2009 | 26-Mar-2009 | 31-Mar-2009 |
* Friday bond tender due to OCR announcement on previous day
Tender announcements will continue to be made on Reuters (page NZDMOINDEX), Bloomberg (page NZDM) and the NZDMO’s website (www.nzdmo.govt.nz).
Treasury Bills
NZDMO expects to continue to offer treasury bills on a weekly basis, but may vary the maturities and/or volume depending on investor interest and short-term funding requirements.
ENDS
Treasury Contacts
Philip Combes | Treasurer
Tel: +64 4 917 6133
Andrew Turner | Head of Portfolio Management
Tel: +64 4 917 6071