The Ministry of Finance and Economic Affairs has published its Medium-Term Debt Management Strategy (MTDS) for 2026–2030. The MTDS describes arrangements for Treasury debt financing over the period and sets forth targets and criteria for the implementation of debt management.
The Strategy creates a framework for decisions on Treasury borrowing and debt administration. Its key objective is to ensure that the Government's financing needs and payment obligations are met at the lowest possible cost consistent a prudent degree of risk.
The Strategy lays down debt management targets and criteria, describes the current structure of the Treasury debt portfolio, and outlines the key risks involved. It also describes the institutional structure of debt management and explains how information disclosure to market agents and investors is carried out.
The MTDS is based on the previous strategy, but it introduces several changes aimed at strengthening the debt management and enhancing predictability in the government´s financing.
“This updated Strategy adapts Government debt matters to changed conditions in the financial markets and ensures that the Treasury remains well positioned as regards financing,” said Daði Már Kristófersson, Minister of Finance and Economic Affairs. “Emphasis is placed on balance, prudence, and clear information disclosure, which is important to the public and to the market.”
Key changes in the Strategy
The new Strategy contains changes in the composition of the Treasury debt portfolio. It sets forth new criteria for loan distribution, with non-indexed loans comprising 45% of the portfolio, index-linked loans 40%, and foreign-denominated loans 15%. This represents a revision of previous criteria and places emphasis on the changed composition of Treasury debt during the period.
Criteria for issuance of Government securities have also been updated. Emphasis is placed on clear price formation for both index-linked and nominal Government bond series. The final size of issued series should generally be at least ISK 50bn for all maturities. The average time to maturity of Treasury debt is unchanged at five to seven years.
Furthermore, the aim is to keep the share of debt maturing in the coming 24 months below 25%. The MTDS assumes that bonds will be issued in international markets each year.
The Strategy also states that the above-specified debt management criteria do not apply to sustainable financing.
Finally, the Strategy describes information disclosure relating to debt management, including the issuance of an annual report on Government debt management, to be published this spring.
The Medium-Term Debt Management Strategy is based on the current fiscal strategy plan and is issued annually. It covers a horizon of five years.
Further information on www.government.is
