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SWEDEN: NDO Recommends Smaller Proportion of Linker Debt

SWEDEN
CEEMEASwedenBulletGlobalFixed Income BulletsRegionMarkets

The Swedish National Debt Office (NDO) has recommended a smaller proportion of inflation-linked debt as part of its annual guideline proposal. The NDO notes that the current proportion of 20% of total debt “neither contributes to reduced cost nor lower risk for the central government debt”.

  • “The proposal entails a reduction in the outstanding volume of inflation-linked bonds from SEK 177 billion to approximately SEK 80 billion by the end of 2029”.
  • The NDO also proposes “changing the measure used for the central government debt’s term to maturity from duration to average time to refixing (ATR)”, keeping the target interval at 3.5-6 years.
  • Further details will be provided in the next NDO forecast report on November 28. but the full proposal can be found here.
  • Relatedly: This Wednesday’s nominal SGB auction will be an important gauge of demand for the on-the-run 2.25% May-35 SGB (1066 line), which has seen weak bid-to-cover ratios at its last three re-openings.
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The Swedish National Debt Office (NDO) has recommended a smaller proportion of inflation-linked debt as part of its annual guideline proposal. The NDO notes that the current proportion of 20% of total debt “neither contributes to reduced cost nor lower risk for the central government debt”.

  • “The proposal entails a reduction in the outstanding volume of inflation-linked bonds from SEK 177 billion to approximately SEK 80 billion by the end of 2029”.
  • The NDO also proposes “changing the measure used for the central government debt’s term to maturity from duration to average time to refixing (ATR)”, keeping the target interval at 3.5-6 years.
  • Further details will be provided in the next NDO forecast report on November 28. but the full proposal can be found here.
  • Relatedly: This Wednesday’s nominal SGB auction will be an important gauge of demand for the on-the-run 2.25% May-35 SGB (1066 line), which has seen weak bid-to-cover ratios at its last three re-openings.