Debt Portfolio Management Quarterly Report - 1st - 3rd Quarter of 2017

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 presents the Debt Portfolio Management 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 2017 published on 22 December 2016 and The Czech Republic Funding and Debt Management Strategy 2017 - Second Half Update published on 30 June 2017, and further contains regular quarterly performance evaluation of primary dealers from the fourth quarter of 2016 to the third quarter of 2017.

In the third quarter of 2017, the Ministry continued to issue and sell medium-term and long-term government bonds on domestic market. The total gross issue carried out on primary market via five auctions in two auction days amounted to CZK 16.8 billion comprising re-opened issues of already issued government bonds of the Czech Republic, while the Ministry focused on prolonging the issued government bonds’ time to maturity, when it issued government bonds with the average residual time to maturity of 10.2 years and the average yield to maturity 0.81% p.a. The total gross issue of medium-term and long-term government bonds on primary market in the first three quarters of 2017 amounted to CZK 144.5 billion with the average yield to maturity 0.14% p.a. and the average residual time to maturity of 6.4 years, of which CZK 74.5 billion or 51.6% were represented by bonds maturing from 2018 to 2022, sold with negative yield to maturity.

The issuance of medium-term and long-term government bonds on primary market during the third quarter of 2017 was supplemented by tap sales from Ministry’s asset account on secondary market in total nominal value of CZK 1.7 billion. In the first three quarters of 2017, tap sales of medium-term and long-term government bonds in total nominal value of CZK 8.8 billion with the average yield to maturity -0.25% p.a. were carried out.

During the third quarter of 2017, the Ministry did not realize any buy-backs of medium-term and long-term government bonds on secondary market. The Ministry has continued to use exchange operations of medium-term and long-term government bonds, within which the Czech Republic Treasury Bond, 2009-2019, 5.00% and the Czech Republic Treasury Bond, 2003-2018, 4.60% in total nominal value of CZK 0.9 billion were exchanged for medium-term and long-term government bonds from Ministry’s asset account with longer time to maturity in total nominal value of CZK 1.0 billion. In the first three quarters of 2017, the mediumterm and long-term government bonds with relatively short residual time to maturity in total nominal value of CZK 3.4 billion were exchanged for government bonds with relatively longer residual time to maturity and lower coupon rate in total nominal value of CZK 3.1 billion.

The regular redemption of the Czech Republic Treasury Bond, 2012-2017, VAR% in total nominal value of CZK 46.8 billion was carried out in the third quarter of 2017 and another CZK 0.8 billion were already exchanged during the year 2017. The total nominal value of net issue of medium-term and long-term government bonds on domestic market after taking into account the impact of exchange operations amounted to CZK -28.2 billion in the third quarter of 2017 and CZK 17.4 billion in the first three quarters of 2017.

Four auctions of state treasury bills were carried out in the third quarter of 2017 and government bonds in total nominal value of CZK 135.6 billion were sold with the average yield to maturity -0.31% p.a. The total nominal value of gross issue of money market instruments excluding the rollover amounted to CZK 2.9 billion in the first three quarters of 2017 and comprised only lending facilities in the form of repo operations. The total nominal value of redemptions of state treasury bills excluding the roll-over amounted to CZK 147.9 billion in the third quarter of 2017. All issued state treasury bills were already repaid. The balance of state treasury bills outstanding thus normalized to an approximate level at the end of 2016, when state treasury bills were gradually substituted for the zero-coupon medium-term government bonds.

No tranches of savings government bonds were issued in the third quarter of 2017, nor were any planned redemptions carried out, only the early redemptions due to the holders’ exercise of this option given by the issuance terms and conditions in the total nominal value of CZK 0.8 million were carried out. The net issue of savings government bonds amounted to CZK -6.7 billion in the first three quarters of 2017.

In the area of issuance on foreign markets no borrowing operation was carried out in the third quarter of 2017 as well as no loan tranche from the EIB was drawn, only planned repayments of loans received from EIB amounting to CZK 0.4 billion and early repayments of CZK 3.4 billion were carried out. In the first three quarters of 2017 repayments amounting CZK 4.9 billion were carried out.

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