This presentation provides key findings from the 2017 edition of the OECD Sovereign Borrowing Outlook. This includes gross borrowing requirements, net borrowing requirements, central government marketable debt, funding strategies and instruments and distribution channels. Find out more information at http://www.oecd.org/finance/oecdsovereignborrowingoutlook.htm

1. OECD Sovereign
Borrowing Outlook 2017
KEY FINDINGS

2. 2
Key findings
Sovereign debt burdens remain high, although the pace of debt accumulation
has stabilised in recent years
• The aggregate central government marketable debt will gradually increase to USD 42.2 trillion
in 2017
• The central government marketable debt-to-GDP ratio, which surged from 49.8% to 74.6%
between 2007 and 2015, is projected to decline to 73% in 2017, reflecting expectations for
higher economic growth
• The high level of debt servicing, combined with large net borrowing needs, has generated
challenging rollover ratios
Ultra-low interest rate environment has had implications on both primary
and secondary markets for government securities
• Cost of sovereign borrowing has reduced considerably in several OECD countries
• Some sovereigns have issued negative yielding debt and received premiums from these issues
• Sovereign funding strategies have leaned steadily towards long-term financing instruments
• Large central banks and public funds have become dominant holders of sovereign debt in major
OECD countries
Post-crisis rise in the use of index-linked sovereign bonds
• The outstanding volume of inflation-linked sovereign debt more than doubled between 2007 and
2015, and is expected exceeds USD 3 trillion in 2017
• Regional aggregates indicate that linker markets, already developed in G7 countries, have been
progressing from their niche status in EMs

3. A continued decline in government borrowing needs has
limited the pace of debt accumulation in recent years
Notes: GBR = gross borrowing requirement, NBR = net borrowing requirement.
Source: 2016 Survey on central government marketable debt and borrowing by the OECD
Working Party on Debt Management; OECD Economic Outlook No 100.
3

4. The central government marketable debt-to-GDP ratio
4
0
10
20
30
40
50
60
70
80
90
100
OECD G7 Euro area - 16 members Emerging OECD Other OECD
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Notes: As a percentage of GDP. Central government marketable gross debt.
Source: 2016 Survey on central government marketable debt and borrowing by the
OECD Working Party on Debt Management; OECD Economic Outlook No 100.
Sovereign debt burdens remain high by historical
standard, though debt-to-GDP ratio is projected to
decline in 2017

5. Redemption profiles continue to be challenging
Cumulative percentage of debt maturing in the next 12, 24 and 36 months
(As a percentage of total marketable debt as of 2016)
Source: 2016 Survey on central government marketable debt and borrowing carried out by the
OECD Working Party on Debt Management; OECD Economic Outlook No. 100; Thomson
Reuters, national authorities’ websites and author calculations.
5

6. Government bonds yields are low, sometimes
even negative
6
Notes: Interest rates in percentages. The charts show the evolution of several metrics (minimum,
maximum, 25th percentile, 75th percentile, median) of 3-year and 10-year benchmark government
bond yields, calculated on the following group of countries: Australia, Austria, Belgium, Canada,
Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Japan, Netherlands, New Zealand,
Norway (5-year and 10-year yields only), Poland, Portugal, Spain, Sweden, Switzerland, United
Kingdom and the United States. Source: Thomson Reuters and author calculations
-5
0
5
10
15
20
25
Range 25th percentile 75th percentile Median
-5
0
5
10
15
20
25
5-year benchmark government bond yield
-2
-1
0
1
2
3
4
5-year benchmark government bond yield

7. Slow pass-through impact from long-term interest rates
to net interest payments on government debt
7
Notes: OECD area estimates. Long-term interest rates derived from long-term interest rate on
government bonds calculated as a GDP weighted average.
Source: OECD Economic Outlook No. 100 and author calculations.

8. Average maturity of outstanding OECD government
marketable debt has been increasing
Notes: Average term-to-maturity in years (e.g. 0.5 years correspond to 6 months) of outstanding
marketable debt.
Source: Surveys on central government marketable debt and borrowing carried out by the OECD
Working Party on Debt Management; debt management offices and national authorities’ websites and
OECD calculations. 8

9. Issuance of ultra-long-term government bonds
is trending upwards
9
Notes: As of December 2016 for OECD countries only, volume is based on issuance amounts using
flexible exchange rates.
Source: Thomson Reuters, national authorities’ websites, OECD Economic Outlook No. 100 and
author calculations.

10. Duration risk of portfolio of outstanding G7
government debt is high
Mark-to-market losses for a 1% yield increase
10
Note: Approximate losses on government bonds issued by G7 governments in G7 markets for an assumed
market interest rate increase by 1% (vertical axis, in USD billion), based on bond-specific estimates of
modified duration (horizontal axis, in years). Excludes short-term securities, data as of December 2016.
Source: Thomson Reuters, and OECD calculations.

11. Some sovereigns have issued negative-yielding debt
and received premiums from these issues
11
Negative-yielding sovereign bond issues
by selected OECD governments*, 2014-2016
Source: Thomson Reuters, national authorities’ websites and author calculations.
Country compositions of outstanding
negative-yielding sovereign bond issues, 2014-2016
*The countries included in this calculation are Austria, Belgium, Czech Republic, Denmark, Finland, France,
Germany, Italy, Japan, Netherlands, Poland, Spain, Sweden and Switzerland
0
30
60
90
120
150
180
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2014 2015 2016
Trillion Total issues amount (USD, LHS) Number of issues (RHS)
JPN, 65%
DEU, 18%
FRA, 9%
NLD, 2%
ITA, 2% Others*, 3%

12. 12
Post-crisis rise in the use of index-linked sovereign bonds
Source: 2016 Survey on central government marketable debt and borrowing carried out by the OECD
Working Party on Debt Management; debt management offices and national authorities’ websites and
OECD calculations.

13. Looking ahead
• Globally, enhanced financial stability and low
interest rate environment have improved current
borrowing conditions in government securities
market
• Looking forward, elevated monetary and fiscal policy
uncertainties pose significant challenges for
sovereign issuers and require concerted efforts
among policy makers, particularly a strong co-
ordination between sovereign debt managers, central
bankers and fiscal authorities to ensure a well-
functioning government securities market

14. Find us online
OECD Sovereign Borrowing Outlook
www.oecd.org/finance/oecdsovereignborrowingoutlook.htm
www.oecd.org/daf/publicdebtmanagement
Contact
Fatos Koc, Head of Bond Market and Public Debt Management Unit,
OECD, Paris, France fatos.koc@oecd.org
Gary Mills, Statistician, Bond Market and Public Debt Management
Unit, OECD, Paris, France gary.mills@oecd.org
Sebastian Schich, Principal Administrator, Financial Affairs Division,
OECD, Paris, France sebastian.schich@oecd.org
14