ANNUAL BORROWING PLAN FOR THE YEAR 2021

ANNUAL BORROWING PLAN FOR THE YEAR 2021

Reference Number: PR210148, Press Release Issue Date: Jan 25, 2021
 
 
In terms of Article 18 of the Government Borrowing and Management of Public Debt Act [GBMPDA] (Cap. 575 of the Laws of Malta) the Treasury is hereby publishing the Annual Borrowing Plan for the Year 2021.
 

Maximum amount of issuance
 
The Treasury announces that the central government borrowing requirements for the financial year 2021 has been set not to exceed €1.1 billion. This amount will be raised mainly through the issuance of Malta Government Securities and Debt Instruments with maturity of more than one year.  A limited amount of €123 million will be borrowed under the SURE Loan Agreement.  
 

Purpose of issuance
 
It is planned that the funds raised from the borrowing programme shall be applied mainly to finance the Central Government borrowing requirements for 2021 including:

  • The redemption of three (3) Malta Government Stocks (MGS) issues amounting to € 462,169,453 which are due to mature as hereunder:
 
​ 8th August 2021
​5% MGS 2021 (I) ​ ​€ 458,844,653
​​​​Ex-Church Property Stock redeemable between 1st January 2021 and 31st December 2021
​7% MGS 2021 (II) € 466,000;
​7% MGS 2021 (III) ​€ 2,858,000;
  • ​financing of Central Government deficit estimated at €756.5 million; and 
  • effecting changes in the Central Government debt portfolio, as and when required, in line with the Government’s debt management policies.
 
 
Types of Securities and Debt Instruments to be issued

It is planned that the conventional fixed rate Malta Government Stock shall be the Treasury's primary financial instrument by which to fund the central government borrowing requirements during the year 2021. Alongside the conventional fixed rate MGS, the Treasury will offer a limited amount of Malta Government Retail Savings Bond which will be similar to the savings bonds issued in the past four years. 
 

Frequency of issuance

The Treasury intends to fund the financing requirements for 2021 over four (4) to five (5) issues. As part of its issuance strategy, the Treasury shall retain the flexibility and capability to adapt quickly to changing market and other conditions and, where necessary will review the type of debt securities/debt instruments to be issued as well as the intervals of issuances. 
 

Maturity and terms of issuance of Malta Government Stocks

The maturity structure of the 2021 MGS issues will be a mix of short and medium to long term MGS. The exact maturity and other details of the offer will be announced from one (1) to two (2) weeks prior to the opening of each issuance. The relevant terms and conditions of an MGS issue will be published by means of an Offering Circular published in the Government Gazette prior to the actual date of each issue.
 

Malta Government Stocks shall be issued under the GBMPDA

The issuance of Malta Government Stocks shall be issued under (1) the Government Borrowing and Management of Public Debt Act (Cap. 575 of the Laws of Malta), (2) the Malta Government Stocks Regulations and (3) the General Prospectus published on the Government Gazette on 30th November 2018. 
 

Collective Action Clauses (CACs) in newly issued Malta Government Stocks

In accordance with paragraph 3 of Article 12 of the modified version of The Treaty establishing the European Stability Mechanism (ESM), all new MGSs issued on or after 1st January 2013 will incorporate the Model Collective Action Clauses (CACs).
 

Treasury Bills
  • T-Bill auctions will continue to be held on a weekly basis, typically on Tuesday of the auction week and settled on the following Thursday on T+2 basis;
  • The maturity structure of issues will include a mix of 28-day, 91-day, 182-day, 273-day and 364-day Treasury bills;
  • The issuance is expected to focus on the 91-day and 182-day tenor;
  • An issuance calendar of Treasury Bills will be published in advance every month in the government gazette announcing the tenor, the auction and the issue (settlement) date for the following month;
  • The Treasury Bills Prospectus may be viewed under the Treasury Bills section on the Treasury’s website at www.treasury.gov.mt.