2023/24 New Zealand Government Bond Programme Increased to NZ$38 Billion
In conjunction with the Half Year Economic and Fiscal Update 2023, the Treasury has updated the forecast core Crown borrowing programme.
The forecast 2023/24 New Zealand Government Bond (NZGB) programme has been increased to NZ$38 billion, NZ$2 billion higher than that published at the Pre-election Economic and Fiscal Update 2023. The forecast NZGB programme for 2024/25 has been increased by NZ$1 billion, to NZ$36 billion, while the 2025/26 has been increased by NZ$4 billion, to NZ$34 billion. The 2026/27 NZGB programme is unchanged at NZ$28 billion.
The 2027/28 year has been added to the forecast period, with a NZ$16 billion NZGB programme.
Forecast short-term borrowings (Treasury Bills (T-Bills) and Euro-Commercial Paper (ECP)) at the end of each fiscal year are unchanged at NZ$9 billion.
Forecasts – New Zealand Government Bonds and short-term borrowings
| Year ending 30 June (face value) | 2024 | 2025 | 2026 | 2027 | 2028 | Total |
|---|---|---|---|---|---|---|
| Gross NZGB issuance (NZ$ billion) | 38.0 | 36.0 | 34.0 | 28.0 | 16.0 | 152.0 |
| NZGB maturities and repurchases (NZ$ billion)1 | 18.8 | 19.9 | 18.1 | 22.6 | 15.5 | 94.8 |
| Net NZGB issuance (NZ$ billion) | 19.2 | 16.2 | 15.9 | 5.4 | 0.5 | 57.2 |
| NZGBs outstanding (NZ$ billion) | 171.6 | 187.8 | 203.7 | 209.1 | 209.6 | n/a |
| NZGBs outstanding (% of GDP) | 41% | 43% | 44% | 43% | 41% | n/a |
| Forecast short-term borrowings (NZ$ billion) | 9.0 | 9.0 | 9.0 | 9.0 | 9.0 | n/a |
- Includes repurchases of bonds from the Reserve Bank of New Zealand held under the Large Scale Asset Purchase programme.
Further Details
- As previously announced, subject to market conditions, it is expected that two new nominal NZGB lines will be launched, via syndication, before the end of the fiscal year. The maturities of the bond lines will be 15 May 2035 and 15 May 2054. Further details will be announced in subsequent updates.
- In addition, a syndicated tap of an existing shorter-dated nominal NZGB is expected prior to the end of the fiscal year, subject to market conditions. Further details, including the specific bond line, will be announced in subsequent updates.
- Gross issuance into inflation-indexed bonds (IIB) is expected to be less than NZ$1 billion in 2023/24, subject to market conditions and indicated demand from market participants.
- The composition of short-term borrowings will include a minimum of US$1 billion of ECP and NZ$2 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 on issue are expected to vary from NZ$6 billion to NZ$15 billion during normal market conditions.
- As previously announced, the January 2024 tender schedule will be published at 8am (NZT) on 21 December 2023.
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