Debt Portfolio Management Quarterly Report - 1st - 3rd Quarter of 2016

Dept 20 - Debt and Financial Assets Management Department
Dept 20 - Debt and Financial Assets Management Department

Published

  • Debt Portfolio Management
  • State Debt
  • Statistics

In accordance with the calendar of published information, the Ministry of Finance (hereinafter the Ministry or MoF) presents the Debt Portfolio Management Quarterly Report (hereinafter the Quarterly Report), which contains in particular the evaluation of the announced strategic targets, operative fulfilment of funding programme and issuance activity plans concretized in The Czech Republic Funding and Debt Management Strategy 2016 (hereinafter the Strategy) published on 18 December 2015 and The Czech Republic Funding and Debt Management Strategy 2016 - Second Half Update published on 24 June 2016, and further contains regular quarterly performance evaluation of primary dealers in Czech government securities in the fourth quarter of 2015 to the third quarter of 2016.

During the third quarter of 2016, the absolute value of the state debt decreased by CZK 31.2 billion to CZK 1,660.1 billion representing a decrease in state debt by CZK 12.9 billion in the first three quarters of 2016. This decrease was allowed by the effective available state treasury liquidity management and the record-breaking performance of the state budget during the first three quarters of 2016 having had achieved highest surplus in the first three quarters of the year since 1993. The Ministry further utilized the favourable financial market conditions as medium-term and long-term government bonds with relatively short time to maturity achieved negative yields. The share of state debt which is not connected to any interest expenditure or generates net interest revenue amounted to 10.1%, i.e. in absolute figures it reached CZK 166.9 billion at the end of the third quarter of the 2016.

The Ministry continued to issue and sell primarily medium-term and long-term government bonds on domestic market. The total gross issue of medium-term and long-term government bonds carried out on primary market via eight auctions in three auction days amounted to CZK 38.6 billion comprising re-opened issues of already issued government bonds of the Czech Republic, among whose zero-coupon government bond maturing in July 2019 was also sold and whose total gross issue in the third quarter of 2016 amounted to CZK 19.8 billion, i.e. 51.3% of total gross issue in the third quarter of the year on primary market will not be burdened with interest expenditure of state budget. The total gross issue of medium-term and long-term government bonds in the first three quarters of the year amounted to CZK 130.2 billion, of which CZK 75.3 billion or 57.8% was represented by the zero-coupon government bonds.

The Ministry achieved additional net revenue of state budget amounting CZK 138.5 million from selling government bonds with a negative yield. The total net revenue from the investment activity within the state treasury liquidity management and the sale of the government bonds with a negative yield carried out in the first three quarters of 2016 amounted to CZK 371.2 million representing an increase by 120% compared to the same period in the previous year.

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