Investor Information January 2018

Transcription

1 Investor Information January 2018 Austrian Treasury

2 Agenda 1. General Overview Austria s favourable fundamentals 3 2. Funding Strategy 26 2

3 Austria Key Data and Facts Austria Euro-Zone Area (sq. km 000) Population 2016 (Mio.) Population growth ( , average yearly change) +0.9% +0.4% GDP per capita 2016 (EUR) Net financial assets per private household as of Q (EUR) Euro-Zone (EU19) EU28 Source: Statistics Austria, Eurostat, OECD 1) EA19 without Ireland 3

4 Austria Key Data and Facts in % Austria Euro-Zone Real GDP growth Inflation (HICP) Unemployment Current Account Balance Budget Balance (Maastricht) Structural Budget Balance Debt to GDP Year Source: Data on Austria: Statistics Austria, September 2017 / Federal Ministry of Finance, October 2017 / WIFO, December 2017 Data on Euro-Zone: EC Autumn Economic Forecast, November 2017 Note: Structural budget balance Austria excludes additional expenditures on refugees and asylum seekers 4

5 Austria GDP and external trade Composition of Austrian GDP 2016 EUR bn Distribution of Austrian Exports Top-10 Export Partners Q Country Share in % Consumption 73% Investments 24% Net exports 3% Exports 52% America 9% Africa 1% EU- Others 10% Asia 9% Australia 1% EU-28 70% Germany 30.5 USA 6.6 Italy 6.4 France 5.4 Switzerland 4.9 Czech Republic 3.7 Imports 49% Eurozone: 51.7% Europe: 79.6% Hungary 3.3 Poland 2.8 United Kingdom 2.8 China 2.5 Source: Statistics Austria as of September 2017 Note: Totals might not add up due to rounding 5

6 Composition of the Austrian GDP - Low exposure to financial sector (3.8% of GDP) Other administrative and support service activities: 8.6% Education; human health and social work activities:11.2% Public administration: 4.6% Other service activities: 2.5% Agriculture, forestry and fishing: 1.1% Mining and quarrying; manufacturing: 16.5% Electricity; water supply; sewerage and waste management: 2.5% Construction: 5.7% Real estate activities: 8.6% Wholesale and retail trade: 10.9% Source: Statistics Austria as of September 2017 Financial and insurance activities:3.8% Information and communication: 3.1% Accommodation and food service activities: 4.8% Transportation: 5.0% 6

7 Credit Ratings Overview Long Term Short Term Outlook Moody s Aa1 P-1 Stable Standard & Poors AA+ A-1+ Stable Fitch AA+ F1+ Stable DBRS AAA R-1 (high) Stable All rating reports available online at 7

8 Austria: Leader in Sustainability Sustainability Country Ranking 1 Sustainalytics oekom research Ranked 5th out of 172 countries worldwide Ranked 9th out of 57 countries worldwide in EUR Environmental protection expenditure per inhabitant 2 Highest environmental protection expenditure per capita 2 and highest share of green jobs in the EU 3 Share of renewable energy sources (in total gross final energy consumption) is over 32%. That is twice the EU average (16%) and puts Austria in 4 th place in Europe 4 Austria has the 2 nd highest recycling rate of waste in the EU 4 1) Reports available online at 2) Eurostat, February 2017 (no data available for Germany, Netherlands, Italy, Ireland, Greece) 3) Eurostat, Employment in the environmental goods and services sector; May ) Eurostat, Sustainable Development in the European Union 2016 With over 20% of its agricultural area utilised under organic farming, Austria ranks 1 st among all EU member states 4 8

9 Austria s High Institutional Strength Worldbank Governance Indicators 2,5 2 1,5 1 0,5 0 Rule of Law Control of Corruption Government Effectiveness Regulatory Quality Voice and Accountability Rule of Law: ranked 10 out of 214 countries worldwide Voice and Accountability: ranked 15 out of 214 countries worldwide Government Effectiveness: ranked 18 out of 214 countries worldwide Control of Corruption ranked 19 out of 214 countries worldwide Regulatory Quality ranked 19 out of 214 countries worldwide Note: Values range from -2.5 (weak) to +2.5 (strong) / data as of October

10 Austria s Favourable Fiscal Position Government Debt Ratio and Budget Deficit on a declining path Forecast Excluding liabilities of government-owned wind-down units, Austria s general government debt was at 78% of GDP (end-2016) More details on the Austrian Draft Budgetary Plan 2018: Source: Statistics Austria, September 2017 / Federal Ministry of Finance, October 2017 * forecasts according to Austrian Stability Programme (as of April 2017) 10

11 Public Debt/GDP in Austria Increase since 2008 substantially below Eurozone-average Euro area % of GDP Greece Italy Portugal Belgium Cyprus Spain France Euro area Austria Slovenia Ireland Germany Finland Netherlands Malta Slovakia Lithuania Latvia Luxembourg Estonia 179, ,1 102,4 126,4 71,7 103,8 92,5 103,0 45,1 98,4 39,5 96,9 68,0 89,3 68,6 78,3 68,4 76,4 21,8 69,9 42, ,8 65,1 2017e 62,7 32,7 57,7 54,7 54,9 62,6 50,6 28,5 41,5 14,6 39,0 18,2 23,7 14,9 9,2 4, Source: Statistics Austria, September 2017 / Federal Ministry of Finance, October 2017 / EC Autumn Economic Forecast, November , Non-euro area and others % of GDP Japan United States United Kingdom EU-28 Croatia Hungary Poland Sweden Romania Denmark Czech Republic Bulgaria , e , ,6 83,5 80,3 72,6 53, ,0 37,9 36,1 34,6 184,6 72,8 49,9 60,7 39,6 71,0 46,3 37,8 13,2 33,3 28,3 25,7 13,

12 e Federal government - Interest payments Absolute level of interest payments relatively stable Relative to GDP interest payments are below 2% and well beneath peak levels in 1996 in Mil EUR in % of GDP 3.4% in % of GDP 1.5% 4,0% 3,5% 3,0% 2,5% 2,0% 1,5% 1,0% 0,5% 0,0% Interest payments 2018 : Forecast as of January 2018, GDP as of December

13 Indebtedness of households and corporates in % of GDP 75 Household Debt Corporate Debt 1 Level of corporate and household indebtedness substantially below Euro-Zone average in % of GDP AT: % of GDP EA: % of GDP AT: % of GDP EA: % of GDP 1 Short- and long-term loans, money and capital market instruments. Source: European Central Bank, Austrian National Bank, October

14 Total indebtedness of the real economy Level of total indebtedness in Austria relatively low Cyprus Ireland Luxembourg Greece Portugal Netherlands Belgium Italy Spain France Finland Austria Estonia Malta Germany Slovenia Slovakia Latvia Lithuania Euro Area: Total debt in % of GDP Government Debt Corporate Debt Household Debt Source: ECB / ESRB, May 2017 (data as of Q4 2016) 14

15 Government debt and household assets in bn EUR in % High domestic wealth Growth in net financial assets of households exceeds increase in government debt GDP per capita is 38% higher than EU-average Household financial assets (Gross) in bn EUR 4 Sustainable current account surplus 100 Household financial assets (Net) in bn EUR Government debt in bn EUR 2 Savings rate in % (rhs) Source: Statistics Austria, March 2017 / Austrian National Bank, April

16 Austria s strong competitive position 6,0 % of GDP Current Account Balance 5,0 4,0 Austria s sustainable current account surplus reflects strong international competitiveness Forecast 3,0 2,0 1,0 0,0-1,0-2,0-3, Austria Euro area EU Source: WIFO, December 2017, Eurostat, EC Autumn Economic Forecast, November

17 Austria is an International Net Lender Net lending (+) / net borrowing (-) of the nation in % of GDP Greece Portugal UK United States net capital import Spain France Ireland Italy Furthermore Austria has a positive net international investment position (Q3 2017: 5.3% of GDP) 1 Finland European Union Euro area Belgium Austria Japan net capital export Germany Netherlands in % of GDP (average e) Source: European Commission (AMECO) as of May ) OeNB, December

18 Slovenia Belgium Luxembourg Germany Lithuania Netherlands Finland Malta Ireland Austria Eurozone (EU-19) Slovakia Portugal Itlay Greece France Spain Latvia Cyprus Estonia Age-related expenditure under control 5 Total Age-related expenditure in the euro area (projected change in pp of GDP, ) Pursuing further structural pension reforms is one of the key goals of the federal government. Source: European Commission Ageing Report, May 2015 (baseline scenario) 18

19 Austria s population growth outperforms European average in % 2015 = Austria Belgium Netherlands France Spain Finland EU-28 Germany Italy Portugal Greece Source: Eurostat, data extracted in April 2017 Population Projections (main scenario): Assumptions related to fertility, mortality, net international migration as well as the approximated values of life expectancy at birth 19

20 High Social Stability 0,50 Gini Coefficient 0,45 0,40 0,35 0,30 0,25 0,20 Austria s low Gini coefficient indicates a relatively equal income distribution Source: OECD Income Distribution Database, no data for Japan and Russia available / Gini coefficient 2015 or latest available, November

21 Austria s favourable fundamentals High GDP per capita and low unemployment Austria s GDP per capita 1 : 4 th highest in the EU in % of EU-28 average Luxembourg: Ireland Austria Netherlands Sweden Germany Belgium Finland France EU 19 GDP per capita since 2007 up from 5 th to 4 th rank in the EU Source: European Commission, Eurostat as of November ) in purchasing power standards Austria s unemployment rate: 4 th lowest in the Eurozone 2001 in % Unemployment rate nearly half of the Eurozone-average 3 rd lowest long-term unemployment and 4 th lowest youth unemployment rate in the Eurozone Austria Euro area EU

22 Strong Innovation Performance Austria s R&D expenditure above peers 4 in % of GDP Research and Development expenditure Finland 3,5 Austria Germany 3 Belgium 2,5 OECD France 2 Netherlands EU-28 1,5 UK Luxembourg Source: OECD (2017), Gross domestic spending on R&D (indicator). doi: /d8b068b4-en (Accessed on 24 November 2017) 22

23 EU Macroeconomic Imbalance Procedure Austria with no major imbalances External Imbalances Internal Imbalances New employment indicators Current Account Balance as % of GDP, 3 year average Net International Investment Position as % of GDP Real Effective Exchange Rate (42 trading partners, based on HICP/CPI), % change (3 years) Export Market Shares, % change (5 years) Nominal ULC, % change (3 years) Deflated House Price Index (1-year % change) Private Sector Credit Flow as % of GDP, consolidated Private Sector Debt as % of GDP, consolidated General Government Sector Debt as % of GDP Unemploy ment Rate, 3 year average Total Financial Sector Liabilities (1-year % change) Activity rate in % of total population aged (3 years change) Long-term unemployment rate in % of active population aged (3 years change) Youth unemployment rate in % of active population aged (3 years change) # of indicators beyond threshold Threshold -4/+6% -35% +/- 5% (EA) +/- 11% (Non- EA) -6% 9% (EA) 12% (Non- EA) 6% 14% 133% 60% 10% 16.5% Belgium Germany Luxembourg Denmark Austria France Netherlands Sweden UK Finland Ireland *9, Source: MIP Scoreboard, European Commission as of November

24 Ireland Malta Luxembourg Cyprus Switzerland Belgium Netherlands Spain Norway Sweden France Germany Denmark Lithuania Latvia Canada Finland Hungary Italy Austria Austria: Least exposed to Brexit scenario 3,5 S&P s Brexit Sensitivity Index 3 2,5 2 Migration Factor Financial Factor Foreign Direct Investment Factor Export factor 1,5 1 0,5 0 Source: S&P, Who has the most to lose from Brexit? Brexit Sensitivity Index (June 9, 2016) 24

25 Austria A Safe Haven Core-Eurozone Economy Diversified and competitive economy No major macroeconomic imbalances, low private sector indebtedness High level of innovation - R&D expenditure 2016e: above 3% of GDP / among Top-10 worldwide 1 Strong exports and tourism - 2 nd most diversified export structure in the world (out of 217 countries) 2 4 th lowest unemployment in Eurozone Sustainable current account surplus Net capital exporting country and positive net international investment position High savings ratio / Top-10 savers worldwide 3 4 th richest country in the EU 4 4 th most peaceful country in the world (out of 163) 5 Very low vulnerability to climate change / ranked 3 out of 116 countries worldwide 6 1) Statistics Austria, April 2017 / Research and Development Expenditures in % of GDP, September 2017 (UNESCO) 2) UNCTAD Statistics, Concentration and diversification indices of merchandise exports, September ) World Bank Global Financial Inclusion Database, (% aged 15+) saved any money in the past year 4) 2016 GDP per capita on purchasing power parities, Eurostat, August ) Institute for Economics and Peace, Global Peace Index 2017, June ) S&P, May

26 in bn EUR Funding 2018 below 3% of Eurozone Total gross funding volume e Redemptions Net funding volume e Note: All funding instruments including own quota of the 2. Funding Strategy 26

27 Funding Outlook 2018 Total issuance including all instruments (RAGB, T-bills, EMTN, loans): 2018: bn EUR 2017: 39.9 bn EUR (updated forecast from Sept 7, 2017: 38 41bn EUR) RAGB issuance 2018: bn EUR RAGB issuance 2017: 24-26bn EUR (updated forecast from Sept 7, 2017) outcome: 26.1 bn EUR 2018: one or two syndicated EUR issues Total portfolio tenor (end-2018): years (end-2017: 10.0 years) Total portfolio interest fixing period (end-2018): years (end-2017: 10.8 years) 2. Funding Strategy 27

28 Key metrics of Federal Debt Portfolio in years % in % 4,5 4,0 3, % 10.0 y ,0 2,5 2,0 1,5 1,0 0, Total Annual Funding: Avg. Maturity Years (lhs) Federal Debt Portfolio: Avg. Maturity Years (lhs) 0,0 Federal Debt Portfolio: Avg. Effective Interest Rate % (rhs) Total Annual Funding: Avg. Yield % (rhs) 2. Funding Strategy 28

29 Auction Calendar & Issuance 2018 Announcement Issue date Value date Jan 2 Jan 9 Jan 11 EUR 0.52 bn increase of 1.50% RAGB EUR 0.86 bn increase of 0.50% RAGB Jan 30 Feb 6 Feb 8 Feb 27 Mar 6 Mar 8 Apr 3 Apr 10 Apr 12 Apr 30 May 8 May 11 May 29 Jun 5 Jun 7 Jun 26 Jul 3 Jul 5 Jul 31 Aug 7 (reserve date) Aug 9 Aug 28 Sep 4 Sep 6 Sept 25 Oct 2 Oct 4 Oct 30 Nov 6 Nov 8 Dec 4 Dec 11 Dec 13 Volume and tenors are announced one week prior to the issue date at A re-opening of existing issues is regularly done in order to enhance liquidity. The average tenor of the outstanding debt is 10 years (as of December 31, 2017). 2. Funding Strategy 29

30 Most recent syndication of the (Sept 2017) 5-yr RAGB 0.0% 100-yr RAGB 2.1% The 100-year RAGB is the longest outstanding government bond worldwide and the first 100y benchmark issued by any European country. Largest ultra-long benchmark ever priced in the history of EUR sovereign issuances and the largest 100y bond outstanding worldwide. With a total book size of over 22bn, this transaction represents the biggest order book and biggest deal size in the history of the. 2. Funding Strategy 30

31 Cornerstones of Funding Strategy Diversity of funding sources (geographically and by instruments) Financial flexibility (e.g. to address specific investor demand) Capitalizing on scarcity value and strong fundamentals Secondary market liquidity Monthly auctions 21 RAGB primary dealers, 9 ATB dealers One of the lowest debt rollover ratios Conservative debt management strategy over 95% fixed rate around 10% short term debt No foreign currency risk Well-balanced maturity profile Reliability, Transparency, stability-oriented approach Rigorous Investor Relations Programme 2. Funding Strategy 31

32 Financing Instruments Government bonds RAGB Debt issuance programme (DIP 144A) EMTN-Programme (Euro Medium Term Notes) Australian Dollar MTN-Programme Kangaroo Programme Online retail savings product (bundesschatz.at) Loans and Schuldschein-Format Austrian Treasury Bills (ATB-Programme) 2. Funding Strategy 32

33 Primary Dealer Panel 21 Primary Dealers for Austrian Government Bonds Barclays Bank PLC BAWAG P.S.K. Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse AG BNP Paribas Citigroup Global Markets Limited Commerzbank AG Deutsche Bank Aktiengesellschaft Erste Group Bank AG Goldman Sachs International Bank HSBC France J.P. Morgan Securities plc Landesbank Baden-Württemberg Merrill Lynch International Morgan Stanley & Co. International plc Natixis NatWest Markets Nomura International plc Oberbank AG Raiffeisen Bank International AG Société Générale UniCredit Bank AG Volksbank Wien AG 9 Dealers for Austrian Treasury Bills Bank of America Merrill Lynch International Limited Barclays Bank PLC BAWAG P.S.K. Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse AG Citigroup Global Markets Limited Credit Suisse Securities (Europe) Limited Goldman Sachs International Raiffeisen Bank International AG UBS Limited UniCredit Bank AG 2. Funding Strategy 33

34 Debt Rollover Ratio among lowest worldwide EU e Italy Portugal Belgium Spain Greece France Netherlands Finland Slovenia Malta Austria Slovakia Latvia Germany Ireland Cyprus Lithuania n/a n/a Luxembourg Estonia Average defined as short-term debt stock of the previous year plus maturing medium- and longterm debt in % of GDP - indicator for refinancing-risk Austria: very low refinancingrisk Conservative strategy Others e Japan n/a USA n/a UK Sweden Norway Turkey Switzerland Source: S&P Global Sovereign Debt Report 2017, February Funding Strategy 34

35 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016 Oct 2016 Nov 2016 Dec 2016 Jan 2017 Feb 2017 Mar 2017 Apr 2017 May 2017 Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018 Jul 2018 Aug 2018 Sep 2018 PSPP* holdings of RAGBs as % of outstanding stock EUR bn Estimated OeNB holdings of RAGBs Austria s capital key: 2.7% Weighted avg. maturity of holdings: 9.1 yrs Purchases will run at least until September 2018 % of RAGB stock - projected (rhs) in % 35% 30% 25% 20% % 10% 5% 0 0% * Public Sector Puchase Programme of the Eurosystem (more details: PSPP Q&A on ECB website) Source: ECB, Austrian Treasury / data as of 31 December Funding Strategy 35

36 Overview: Investors in Austrian Government Bonds Over 90% of debt held by investors domiciled in Europe Over 80% within the Eurozone 1 Domestic Non-domestic Prior to introduction of EUR around 70% (=ATS) 30% After introduction of EUR around 80% (=EUR) 20% Distribution by region 2 Europe (incl. Austria) 87% Americas 7% Asia 4% Middle East 1% Africa 1% Distribution by category 2 Banks 38% Asset managers 30% Insurance & pension funds 17% Central banks & int. org. 12% Retail 2% Others 1% Source: 1) IMF (CPIS) / Austrian National Bank 2) Austrian Treasury estimates: syndicated RAGB issues Diversified investor base with Eurozone as home market (and strong overweight by Austrian investors) 2. Funding Strategy 36

37 Austria s stable Investor Base 80% 70% 60% 50% 40% 30% 20% 10% 0% Central Banks & Official Institutions Investors by type and region (syndicated RAGB issues)* Asset Managers Banks Insurance & Pension Funds Retail Other 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Austria Europe excl. Austria Africa Asia Middle East America Source: Austrian Treasury * Primary market: 10-year maturities only (excluding PSPP purchases) 2. Funding Strategy 37

38 in bn. EUR Debt Portfolio Redemption Profile Well Diversified Redemptions as of Redemptions as of Conservative debt portfolio: around 10yrs average maturity over 95% fixed rate among the lowest rollover ratios worldwide Funding Strategy 38

39 y Yields - Austria vs. Germany Yield in % 5,0 4,5 4,0 10y Austria benchmark yield 3,5 3,0 2,5 2,0 1,5 1,0 10y Germany benchmark yield 0,5 0,0-0,5 Source: Bloomberg 2. Funding Strategy 39

40 Summary Strong credit fundamentals, diversified and competitive economy No major macroeconomic imbalances Sound financial policies (e.g. falling debt/gdp ratio) High institutional strength Low unemployment rate Strong exports and tourism Sustainable current account surplus Conservative funding strategy Net capital exporting country and positive net international investment position 40

41 Further Information (Austrian Treasury): auction calendar, debt portfolio, rating reports, etc. (Online retail savings product ) (Federal Ministry of Finance): details on the Austrian budget and Financial Stability Measures (Statistics Austria) (Austrian Court of Audit): Reports on the Federal Financial Statements (in German only) (Austrian National Bank) (Austrian Fiscal Advisory Council) (Eurostat) (EFC Sub-Committee on EU Sovereign Debt Markets) (OeKB / Austrian Government Bonds page) 41

42 Contact Austrian Treasury Austria 1010 Vienna, Seilerstaette 24 Phone: (+43 1) Web: Reuters: AFFA01 07 Bloomberg: RAGB, AUST Managing Director Markus Stix, Capital Markets Contact: Christian Schreckeis, CFA (Head), ext. 48 Martin Dymkowski, ext. 46 Christoph Frömel, CFA, ext. 44 Anja Tritremmel, CFA, ext. 37 Money Markets Contact: Günther Wahl (Head), ext. 16 Sabine Denk, CFA, ext. 14 Pia Zivanovic-Amann, MBA, ext