Debt Office proposes longer maturity of Swedish government debt

30 September 2015 - Press release

The Swedish National Debt Office proposes extending the maturity of central government debt as the cost advantage of short-term borrowing has diminished. A longer maturity means smaller cost variations, the Debt Office writes in its proposed guidelines for debt management.

The Debt Office makes the assessment that the maturity of the central government debt should continue to be relatively short, but that there is scope for a gradual extension of the maturity. As the difference between short-term and long-term interest rates has shrunk the Debt Office assesses that the maturity can now be extended at a low or no cost.

The maturity of the debt can be extended for example by reducing the volume of interest-rate swaps that the Debt Office now uses to shorten the maturity.

The smaller difference between short and long borrowing costs also means that there is scope to broaden the interval for the maturity of the nominal krona debt. For the same reason, the Debt Office proposes that the maturity of the foreign-currency debt should be steered within an interval instead of towards a benchmark.

Proposed guidelines

  • The maturity of the nominal krona debt for instruments with maturities of up to twelve years is to be between 2.6 and 3.6 years (previously between 2.6 and 3.1 years).
  • The maturity of the inflation-linked krona debt is to be between 6 and 9 years.
  • The maturity of the foreign currency debt is to be between 0 and 1 year (previously 0.125 years).

The guidelines process

The Debt Office shall propose guidelines for central government debt management to the Government no later than 1 October each year. The Government gives the Riksbank the opportunity to comment on the Debt Office's proposal before it adopts new guidelines no later than 15 November each year.

Central government debt management – proposed guidelines 2016–2019, pdf

Contact

Linda Rudberg, press officer, +46 (0)8 613 45 38