2024/25 New Zealand Government Bond Programme Set at NZ$38 Billion
In conjunction with the Budget Economic and Fiscal Update 2024, the Treasury has updated the forecast core Crown borrowing programme.
The forecast 2024/25 New Zealand Government Bond (NZGB) programme has been set at NZ$38 billion, NZ$2 billion higher than that published at the Half Year Economic and Fiscal Update 2023. The forecast NZGB programme for 2025/26 has been increased by NZ$2 billion, and the programmes for 2026/27 and 2027/28 have both been increased by NZ$4 billion. The 2023/24 year is unchanged, with a NZ$38 billion NZGB programme.
Short-term borrowings (Treasury Bills (T-Bills) and Euro-Commercial Paper (ECP)) at the end of 2023/24 are forecast to be NZ$18 billion. At the end of each of the remaining forecast years, short-term borrowings are forecast to be NZ$13 billion.
Forecasts – New Zealand Government Bonds and Short-term Borrowings
| Year ending 30 June (face value) | 2024 | 2025 | 2026 | 2027 | 2028 | Total |
|---|---|---|---|---|---|---|
| Gross NZGB issuance (NZ$ billion) | 38.0 | 38.0 | 36.0 | 32.0 | 20.0 | 164.0 |
| NZGB maturities and repurchases (NZ$ billion)1 | 18.8 | 19.9 | 17.9 | 23.2 | 16.1 | 95.7 |
| Net NZGB issuance (NZ$ billion) | 19.2 | 18.2 | 18.2 | 8.8 | 3.9 | 68.3 |
| NZGBs outstanding (NZ$ billion) | 171.6 | 189.8 | 207.9 | 216.8 | 220.7 | n/a |
| NZGBs outstanding (% of GDP) | 42% | 44% | 46% | 45% | 44% | n/a |
| Forecast short-term borrowings (NZ$ billion) | 18.0 | 13.0 | 13.0 | 13.0 | 13.0 | n/a |
- Includes NZ$5 billion per annum repurchases of bonds from the Reserve Bank of New Zealand held under the Large-Scale Asset Purchase programme until 2026/27.
Further Details
- As previously announced, a tap syndication of the existing 15 May 2028 nominal bond is expected to be executed in June 2024. The volume of the tap syndication will not be limited by the forecast 2023/24 NZGB programme and may prefund part of the 2024/25 NZGB programme.
- Subject to market conditions, it is expected that three nominal bond syndications will be undertaken in 2024/25. Two are expected to be tap syndications of existing nominal bond lines, while one syndication is expected to be the establishment of a new bond line. Further details of syndications will be announced in subsequent updates.
- Individual nominal bond line size caps have been increased from NZ$18 billion to NZ$25 billion.
- Gross issuance into inflation-indexed bonds is expected to be less than NZ$1 billion in 2024/25, subject to market conditions and indicated demand from market participants.
- Due to current forecast portfolio requirements, buybacks of the 15 April 2025 nominal bond are unlikely to be offered by NZDM prior to maturity. However, the Reserve Bank of New Zealand is likely to commence a buyback programme prior to maturity, as is standard practice.
- The composition of short-term borrowings will include a minimum of US$3 billion equivalent of ECP and NZ$3 billion of T-Bills. The balance of short-term borrowings will be a mix of ECP and T-Bills, depending on relative cost and market dynamics.
- A flexible approach to short-term borrowing will continue to be taken in the annual borrowing programme. Actual issuance of short-term borrowings may vary from forecast, based on realised short-term cash needs. Intra-year, short-term borrowings are expected to vary from NZ$10 billion to NZ$25 billion during normal market conditions. See our latest NZDM Insights, 'NZDM's short-term borrowing strategy', for further information.
ENDS
Treasury Contacts
Kim Martin | Director, New Zealand Debt Management
Tel: +64 4 890 7274
Paxton McKenzie | Head of Funding, Investment and Markets
Tel: +64 4 917 6925