The government primarily funds its deficit by issuing nominal bonds in kroner.
Focus on 2- and 10-year segment
The recent years’ issuance strategies have focused on issuing the 2- and 10-year nominal bonds. To a limited extent, the government also issues the 30-year nominal bond. This focus is expected to continue. Rapid build-up of outstanding volume to the levels of liquid benchmark bonds will increase the liquidity of the new bonds, allowing market participants to trade efficiently at low costs.
Regular opening of new bonds
To maintain the bond portfolio, new nominal bonds are opened at approximate intervals: A 2-year bond every two years, a 10-year bond every two years. This continuous process of new issues should enable an effective shift of investors from off-the-run to on-the-run issues and allow investors to move further along the yield curve. The on-the-run bonds are expected to be offered regularly at ordinary auctions and at switch auctions in exchange for the central government’s off-the-run bonds, aiding in the liquidity-building process of the on-the-run issue.