Issue date: 
Tuesday, 18 December 2007

Embargoed until 12.30pm

Philip Combes
New Zealand Debt Management Office

Update to the 2007/08 Domestic Debt Programme

In conjunction with the release of the Government’s Half Year Economic and Fiscal Update, the New Zealand Debt Management Office (NZDMO) announced today that the Government’s 2007/08 domestic bond programme will remain at up to $2,500 million as announced at the time of Budget 2007.

While the fiscal outlook shows the Government continuing to strengthen its fiscal position over the forecast period, the bond programme is forecast to be maintained at $2,500 million in each year.  Continuing issuance supports bond market liquidity, which is important in preserving the Government’s ability to fund cost-effectively over the medium term.

Measures to Improve Bond Market Liquidity

Given current concerns over the lack of liquidity in the government bond market, the NZDMO also announced the following initiatives aimed at improving liquidity: 

  • increasing the target level for each bond maturity from $4,000  million to $4,500 million;
  • delaying the introduction of a new ten-year bond in order to concentrate issuance into fewer and larger maturities;
  • moving to a more frequent tender schedule that offers two tenders per month; and
  • introducing “tap” tenders to take advantage of pockets of demand as they occur.

“We are introducing these new measures following consultation with market participants,” said NZDMO Treasurer, Philip Combes.  “The market has told us that a new ten-year benchmark bond is not required immediately and so we will look to continue issuance of the December 2017 bond and other existing bond maturities in line with our funding requirements.”

“The twice-monthly tender schedule and the introduction of tap tenders are an extension of the more flexible approach to bond issuance which we have adopted since 2005,” said Mr Combes.  “The new tender schedule will be introduced in January 2008.  Tender composition will continue to be announced two business days prior to each tender.”

“Tap tenders will be identical to scheduled tenders but are expected to be less frequent in nature. They are designed to offer additional flexibility to issue bonds to the market at times when strong demand builds up outside the regular tender schedule.  We will be providing further details in the first quarter of 2008.”

“We are also working on the provision of a government bond repurchase facility to lend additional support to bond market liquidity.  We anticipate that market consultations will take place in the first half of next year.”

Bond Tender Schedule – January to March 2008

Tender Number Announcement Date Tender Date Settlement Date
248 15 jan 2008 17 Jan 2008 23 Jan 2008
249 29 Jan 2008 31 Jan 2008 5 Feb 2008
250 12 Feb 2008 14 Feb 2008 28 Feb 2008
251 26 Feb 2008 28 Feb 2008 04 Mar 2008
252 11 Mar 2008 13 Mar 2008 18 Mar 2008
253 25 Mar 2008 27 Mar 2008 01 Apr 2008


Infrastructure Bonds

The $438 million of Infrastructure Bond funding anticipated for the 2007/08 fiscal year has been reduced by $173 million to $265 million due to changes in the timing of forecast expenditure. So far this fiscal year, $100 million of Infrastructure Bonds have been issued.

Treasury Bill Programme

The NZDMO intends to continue offering between $100 million and $200 million of three-month treasury bills each week while it is cost-effective to do so.


Treasury Contacts

Philip Combes | Treasurer
Tel: +64 4 917 6133

Andrew Turner | Head of Portfolio Management
Tel: +64 4 917 6071

Last updated: 
Friday, 8 July 2016