NZDM expands issuance programme to NZ$60 billion

On 14 May, New Zealand Debt Management (NZDM) increased its New Zealand government bond (NZGB) programme to NZ$60 billion (US$35.9 billion) for the 2020/21 financial year, NZ$50 billion higher than forecast at its half year economic and fiscal update on 11 December 2019.

Released in conjunction with the New Zealand Government’s Budget Economic and Fiscal Update 2020, NZDM revised higher its forecast bond programmes for future years (see table). NZDM’s media statement says the increases are due to the unprecedented impact of COVID-19 on the New Zealand government’s fiscal outlook.

New Zealand government bonds and treasury bills forecast

Year ending 30 June (face value)20202021202220232024Total
Gross NZGB issuance (NZ$bn) 25 60 40 35 30 190
NZGB maturities and repurchases (NZ$bn) 5.4 11.1 0 15.8 15.4 47.6
Net NZGB issuance (NZ$bn) 19.6 48.9 40 19.2 14.6 142.4
NZGBs on issue (NZ$bn) 90.2 139.1 179.1 198.4 213 N/A
NZGBs on issue (% of GDP) 31 47 55 56 57 N/A
Forecast Treasury Bills on issue (NZ$bn) 10 10 10 10 10 N/A

Source: New Zealand Debt Management 14 May 2020

NZDM also revealed plans for a new nominal, syndicated NZGB to be launched between 30 June and 30 September 2020, with the maturity to be confirmed, while a syndicated tap of an existing maturity will also take place during this period. The new syndicated May 2024 line is still expected to take place in June, as announced on 29 April. 

NZDM says issuance into inflation-indexed bonds is expected to be between NZ$1-2 billion in 2020/21. On 13 May, the Reserve Bank of New Zealand announced it was expanding its large scale asset purchase programme to NZ$60 billion from the previous NZ$33 billion limit and would now include inflation-indexed bonds.

Individual nominal NZGB tranche size caps have also been increased to NZ$18 billion from NZ$12 billion.

NZDM's next update is expected to occur alongside the pre-election economic and fiscal update 2020.

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