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The Swedish National Debt Office will issue swaps during 2009 and 2010 for amounts corresponding to SEK 45 and 25 billion respectively. In our latest forecast, we estimated issuing SEK 50 billion in each of these years.
The forecast presented in Central government borrowing - forecast and analysis 2008:3 was based on our proposal to shorten the time to maturity (interest rate refixing period) for the nominal krona debt to 3.2 years. The Government has now decided that the objective for the maturity for the nominal krona debt should remain at 3.5 years. The reason behind this is the increased uncertainty that has emerged during the autumn about the development of the real economy and central government finances. The Government wants to wait before deciding on how the time for maturity should evolve in the long term.
In our latest borrowing forecast, we said that the proposed shortening of the time to maturity would not affect the funding in bonds, but would instead be implemented by means of swaps. As the time to maturity will not be shortened now, swap volumes will be slightly lower than we had anticipated. However, this will not affect the funding in government bonds. There may be a marginal effect on treasury bill funding.
Some slight increase in the funding in foreign currency bonds may be considered. This is due to the fact that the lower volume of swaps means that the room for foreign currency funding using swaps will be reduced. However, it is too early to provide any new information about how the foreign currency funding will be done, as this depends on the terms we can achieve. We can also use currency forwards to achieve our objective for foreign currency exposure. The total amount of foreign currency funding will not be affected.
For further information, please contact:
Thomas Olofsson, Head of Funding, telephone +46 8 613 47 82 Eric Morell, Analyst, telephone +46 8 613 47 71
This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
