Following the publication of the Budget Memorandum by the Minister of Finance on 17 September 2019, the borrowing requirement for 2019 has been updated.

The total borrowing requirement for 2019 is now estimated at € 38.2 bn. Both an increase in the anticipated cash surplus for 2019 as well as an increase in the amount of cash collateral under management have led to a decrease of the borrowing requirement. The latter is due to the decline in interest rates over the past couple of months, which has increased the value of the swap portfolio and thereby the posting of cash collateral. On balance, the estimated borrowing requirement for 2019 is € 6.2 bn. lower compared to the previous estimate of May.

Borrowing requirement 2019

Update (€ bn.)

Previous (€ bn.)

Capital market redemptions 2019

29.6

29.6

Money market ultimo 2018

20.2

20.2

Change in cash collateral in 2019 (Jan – Aug)*

-8.7

-5.0

Cash surplus**

-3.2

-0.6

Buy-backs DSLs 2020 and DSLs 2021 (Jan – Aug)

 0.3

 0.2

Total borrowing requirement

38.2

44.4

*a decrease (increase) in cash collateral is shown as a positive (negative) number because it increases (decreases) the total borrowing requirement.

**a cash surplus (deficit) is depicted as a negative (positive) number because it decreases (increases) the total borrowing requirement.

The DSTA expects to fund around € 21.0 bn on the capital market through the issuance of DSLs in 2019. This is in the middle of the committed issuing range of € 19-23 bn as announced in the annual Outlook 2019. The remaining part of the borrowing requirement is captured by the money market, for which a year end figure of € 17.0 bn is now foreseen.

Call on capital market and money market 2019

(€ bn.)

Capital market issuance (DSLs)

21.0

Additional cash flow from DSLs not issued at par (Jan-Sep) 0.2

Money market ultimo 2019 (excl. cash collateral)

17.0

Total

38.2

The next update of the borrowing requirement will be provided in December, after the publication of the Outlook 2020. The issuance calendar for the first quarter of 2020 will be published on 13 December.