Norwegian budget points to slightly higher NGB issuance

Norway government presented its budget for 2016 today. It points to 54bn issuance of NGBs next year, slightly higher than the 50bn of issuance will be seen this year.

The government's funding need stems from various lending schemes, such as student loans and mortgages for public employees. While the deficit of the day to day running of the government is funded by a transfer from the petroleum fund, these schemes are funded through issuance of government bonds. 

With a issuance of NOK 54bn the government maintains the relative high issuance volume over the previous years. A lower issuance volume is expected as the underlying funding need is plummeting, says Nordea Bank.


The underlying funding need from the various lending schemes is reduced by 26bn from 2015 to 2016 to 10bn. This is mainly due to an over 20bp drop in net lending to mortgages for public employees.