Australian Government, the Australian Office of Financial Management

FINANCIAL MARKET PRESENTATION

9 JULY 2002

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Financial Market Presentation

Introduction

  • Budget statements
  • Funding instruments
  • Portfolio risk management

Introduction

Headline Cash Balance

Headline cash balance

Net Debt & Net Interest

Net debt and net interest

"The reduction in net debt will continue to be managed in line with the objective of maintaining the viability of the Commonwealth Government Securities (CGS) market".

The reduction in net debt

"The reduction in Commonwealth net debt has raised questions by some market participants about the future viability of the CGS market. The Government acknowledges these concerns and is carefully considering them, taking the views of key stakeholders into account".

Reduction in Commonwealth net debt

Treasury Bond Tenders

  • 13 August 2002
  • 15 October 2002
  • 10 December 2002

Treasury bond tenders

Conversion Tenders

  • Continuing with conversions
  • No objective to eliminate October 2007
  • Subject to market demand
  • Possibility of other stocks
  • Feedback welcomed

Conversion Tenders

Repurchases

  • February 2006 at fair value
    • - details to be announced
  • Non-benchmark securities
    • - 5 basis points above
  • Rebateable securities
    • - 10 basis points below

Repurchases

Treasury Indexed Bonds

Treasury Indexed Bonds

Treasury Notes

  • Significant within year funding requirement
  • Issue as required, noting cash levels at RBA
  • Expect to issue late August 2002 to February 2003

Treasury Notes

Interest Rate Swaps

  • Program for this financial year under review
  • Public announcement following review

Interest Rate Swaps

FX Exposure

  • Mid-2000 factors driving fx share of debt portfolio
  • December 2000 - Treasurer suspended fx benchmark
  • June 2001 - Treasurer agreed no fx exposure
  • Orderly rundown of fx exposure over the medium/long term

FX Exposure

Corporate Governance

Corporate Governance

Commitment to provide further updates

Commitment to provide further updates

 

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