On 5 January, the Treasury of Malta announced that the amount of issuance of Malta Government Stocks during 2017 will not exceed €600 million. The funds raised will be used to finance the government’s borrowing requirements (estimated at €128.3 million) as well as to finance the redemption of five MGS issues totalling €371.8 million and effect changes to the Government’s debt portfolio in line with its debt management policies.
The Treasury explained that it will be issuing three different types of securities – the conventional fixed rates MGSs, the launch of the new Malta Government Savings Bonds for pensioners, and Floating rate MGSs linked to the 6-month Euribor. The latter are principally targeted for institutional investors.
The Treasury is aiming to spread its issuance programme over 4 to 5 issues with the first issue expected to take place in February 2017.
The maturity structure of the 2017 MGS issue programme will be a mix of short and medium to long term MGS. The full details of the stocks on offer and the respective amounts and maturities will be published 1 to 2 weeks prior to each offer.
The Treasury reiterated that all MGS issues will continue to include a clause referred to as the Model Collective Action Clauses (CACs) in line with the modifications endorsed by all euro area member states on 2 February 2012 in relation to the establishment of the European Stability Mechanism (ESM). By virtue of these new clauses, only a simple majority is needed to re-contract sovereign debt (issued on or after 1 January 2013 and with a maturity of more than 1 year) thereby facilitating agreement between the sovereign and its private-sector creditors.
In the press release, the Treasury also explained that it will continue to hold auctions for treasury bills on a weekly basis.