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Management of refinancing risk

Refinancing risk is the risk that debt will have to be refinanced at an unusually high cost or, in extreme cases, cannot be refinanced at all.

  • For managing refinancing risk, outstanding short-term debt (maturity under 1 year) cannot exceed 25% of the State’s budgeted expenditures (total of costs and investments).
  • The repayments of long-term debt obligations (final maturity greater than 1 year) in a year should be spread out so that the annual repayments of debt are not more than 5% of the forecasted GDP each year.

Graph: Duration and average term to maturity of the outstanding debt
*Data from 30.04.2020.                                                                                                              

Table: The main risk characteristics of the Liquidity Reserve, the Stabilisation Reserve Fund and the outstanding debt

 

Debt Portfolio

Liquidity Reserve

Stabilisation Reserve Fund

 

31.12.19

31.03.20

31.12.19

31.03.20

31.12.19

31.03.20

Amount

697 million

870 million

962 million

768 million

414 million

411 million

Modified duration

0.12 years

0.28 years

0.06 years

0.19 years

0.61 years

0.86 years

Average term to maturity

4.1 years

3.3 years

 

 

 

 

Currency

100% EUR

100% EUR

100% EUR

100% EUR

100% EUR

100% EUR

Composition

Two floating rate loans and a Treasury bill

Two floating rate loans and two Treasury bills

10% bonds and 90% cash

26% bonds and 74% cash

99% bonds and 1% cash

99% bonds and 1% cash

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Last updated: 12 May 2020