DENMARK - The Danish government and central bank have agreed to issue a long-term government bond for the amount of around DKK60bn, following demands from the Danish pension sector.

The Danish pension sector has been arguing for some time there were insufficient bonds in the market to meet the long-term commitments to their customers.

The introduction of a 30-year Danish government bond will assist in pension fund liability risk management, rather than through euro government securities which have a long tenure and different types of derivatives that are mainly denominated in the euro.

it is anticipated the bond will build in value up to around DKK60bn however the final sum will depend on market demand.

The strategy for issuance of domestic government bonds remains unchanged as the government will build up 10-year government securities every second year to a final outstanding of around DKK60bn. 

The government will open the auction of the bond on 11 November and the government bond will then mature the 15 November 2039.

The government said the opening depends on stable market conditions but following to the opening auction, it is planed the growth in value of the government bond will continue via tap sale or auctions.

The issuing of government bonds happens at the same time as the government have chosen to open up the social fund and invest around DKK22bn in mortgage bonds as the loans in housing are due for refinancing in December.