Annual Borrowing Plan for the year 2020

In terms of Article 18 of the Government Borrowing and Management of Public Debt Act [GBMPDA] (Cap. 575 of the Laws of Malta), the Treasury is hereby publishing the Annual Borrowing Plan for the year 2020.

Securities and Debt Instruments with maturity of more than one year

Maximum amount of issuance

The Treasury announces that the issuance of Malta Government Securities and Debt Instruments with maturity of more than one year for the financial year 2020 has been set not to exceed € 450 million.

Purpose of issuance

It is planned that the funds raised from the borrowing programme shall be applied mainly to finance the Central Government borrowing requirements for 2020 including:

• The redemption of six Malta Government Stocks issues amounting to € 461,539,762 which are due to mature as hereunder:

25th April – 4.6% MGS 2020 (II) – € 158,327,200

10th June – 5.2% MGS 2020 (I) – € 52,407,462

31st July – 3.35% MGS 2020 (IV) – € 64,040,000

26th September – 2% MGS 2020 (V) – € 138,484,400 29th October – FRN MGS 2020 (VI) – € 47,850,000,

Ex-Church Property Stock redeemable between 1st January and 31st December;

7% MGS 2020 (III) – € 430,700; and

• Effecting changes in the Central Government debt portfolio, as and when required, in line with the government’s debt management policies.

Types of Securities and Debt Instruments to be issued

The issuance programme will be covered by the issue of three different types of securities/debt instruments;

• The conventional fixed rate MGS;

• The Floating Rate MGS linked to the six-month Euribor; • Malta Government Retail Savings Bond.

The conventional fixed rate Malta Government Stock shall be the Treasury’s primary financial instrument by which to fund the central government borrowing requirements during the year 2020.

Alongside the conventional fixed rate MGS, the Treasury may offer a limited amount of the Floating Rate MGS linked to the six-month Euribor through the auction mechanism mainly for institutional investors as well as limited amount of Malta Government Retail Savings Bond, which will be similar to the savings bonds issued in the past three years.

Frequency of issuance

The Treasury intends to fund the financing requirements for 2020 over four (4) to five (5) issues. As part of its issuance strategy, the Treasury shall retain the flexibility and capability to adapt quickly to changing market and other conditions and, where necessary will review the type of debt securities/debt instruments to be issued as well as the intervals of issuances.

Maturity and terms of issuance of Malta Government Stocks

The maturity structure of the 2020 MGS issues will be a mix of short and medium to long term MGS. The exact maturity and details on whether the offer will be for a new stock or a re-opening of an existing MGS will be announced one to two weeks prior to the opening of each issuance. The relevant terms and conditions of an MGS issue will be published by means of an Offering Circular published in the

Government Gazette prior to the actual date of each issue.

Malta Government Stocks shall be issued under the GBMPDA

The issuance of Malta Government Stocks shall be issued under (1) the Government Borrowing and Management of Public Debt Act (Cap. 575 of the Laws of Malta), (2) the updated Malta Government Stocks Regulations and (3) the General Prospectus published on the Government Gazette on 30th November 2018.

Collective Action Clauses in newly issued Malta Government Stocks

In accordance with paragraph 3 of Article 12 of the modified version of The Treaty establishing the European Stability Mechanism, all new MGSs issued on or after 1st January 2013 will incorporate the Model Collective Action Clauses.

Treasury Bills

• T-Bill auctions will continue to be held on a weekly basis, typically on Tuesday of the auction week and settled on the following Thursday on T+2 basis;

• The maturity structure of issues will include a mix of 28day, 91-day, 182-day, 273-day and 364-day Treasury bills;

• The issuance is expected to focus on the 91-day and 182

day tenor;

• An issuance calendar of Treasury Bills will be published in advance every month in the government gazette announcing the tenor, the auction and the issue (settlement) date for the following month;

• The Treasury Bills Prospectus may be viewed under the Treasury Bills section on the Treasury’s website at www.treasury.gov.mt.