The Debt Office adheres to a borrowing policy, for example regarding which types of debt instruments are used and how priorities are made between the instruments and between maturities.
Nominal government bonds – the most important source of funding
Nominal government bonds are prioritised over other debt instruments, and the Debt Office issues them regularly according to an established auction plan. By selling smaller volumes on numerous occasions, investors are continually offered access to government bonds via the primary market.
The strategy to minimise borrowing costs over the long term is to be predictable and build a sufficient volume in each bond to ensure good liquidity. The Debt Office also strives to maintain a relatively even maturity profile in its bond portfolio.
Inflation-linked bonds as a complement
By issuing inflation-linked bonds, the Debt Office can attract investors that wish to avoid the risk of having the value of their bonds depleted by inflation. The proportion of inflation-linked debt should be sufficient to enable liquid trading of inflation-linked bonds, but not so great that it displaces borrowing in nominal government bonds, thus deteriorating liquidity in that market.
The Debt Office holds auctions regularly and strives to maintain an even maturity profile for the inflation-linked bonds as well.
Treasury bills are used to compensate for fluctuations
Treasury bills enable the Debt Office to conduct short-term borrowing in the krona market. Treasury bills are regularly issued via auctions and can also be sold within the liquidity management operations. In the borrowing plan, treasury bills are used primarily to compensate for fluctuations in the borrowing requirement, so that we can maintain a stable supply of nominal government bonds.
Every three months, the Debt Office issues a new twelve-month bill that matures on an IMM date (third Wednesday in March, June, September and December). In the other months, a new three-month bill is introduced. This means that there are always at least four outstanding maturities of up to six months.
Foreign currency bonds enable good borrowing preparedness
On the international capital market, the Debt Office can borrow large amounts in a short period of time. There is therefore also cause to issue foreign currency bonds when the borrowing requirement is low, as this keeps us prepared to borrow larger amounts if necessary.
Because the Debt Office is a small participant in the international capital market, unlike on the Swedish market, there are greater possibilities of being flexible and adapting borrowing to current market conditions.