Dear Delegate,

In 2008, debt managers throughout the world are facing demands arising from growing government deficits and intense competition among issuers, in part due to financial liberalisation.

Increasingly, they are required to take on new responsibilities for managing government’s financial activities, notably in cash management and public-private partnerships projects, and support the development of domestic bond markets.

This means that efficient public debt management has become crucial to the broad economic strategy of many governments.

A well-designed debt strategy is essential for encouraging the development of smoothly-functioning domestic financial markets, which is a crucial component of financial crisis prevention.

This course is designed to help government debt managers tackle and resolve these challenges.
It will address the key areass:

• Challenges and objectives
• Institutional structure and relationships
• Instruments and issuance techniques
• Market interactions
• Domestic market development
• Effective measurement of performance

Introduction, and participant challenges and experiences
Led by the chairman, Ian Storkey

About the course chairman
Ian Storkey is Director of Storkey & Co Limited, an international management consultancy established in January 2001 to provide independent specialist advice and guidance to governments on public debt management. He has been an adviser and project manager under ADB, AusAID, Commonwealth Secretariat, DCI, DFID, NZAID, UNCTAD, UNDP, USAID and World Bank funded programmes to assist governments worldwide to build their capacity and systems in public debt and cash management. Previously, he worked for 24 years in the New Zealand Treasury, including the NZ Debt Management Office in Wellington

Issuance choices and techniques
Gurminder Bhachu
Co-Head of Policy, UK Debt Management Office

Today debt managers are faced with a wide range of options for the debt they issue and how they do it. Yet clearly some choices and techniques are better suited to specific market conditions than others. How should debt managers go about making issuance choices and what are the optimal techniques they should use under different circumstances? This session considers the various alternatives available, their pros and cons, and how a debt manager should set priorities. The speaker will also speak on the new plans by the UK government to become an issuer of sterling Islamic financial instruments.

Debt strategy, analysis and contingent liabilities
Jean-Paul Renne
Deputy Head of Operational Research, Agence France Tresor

An effective debt strategy must take into account the possible consequences of rapidly changing conditions in markets. This involves asking detailed questions about the securities market: how has liquidity changed, and which sectors or which parts of the yield curve have been affected? This session will also look at the balance sheet issues that arise from contingent liabilities and the key technical skills the debt manager needs to be able to successfully take them on.

A view from the market
Henrietta Podd
Managing Director of International Bond Origination, RBC Capital Markets

Debt managers occupy an influential position in domestic financial markets, and their decisions have important implications for market competitiveness, stability and development. This session considers what markets need from debt managers, and how the impact on markets can be incorporated into a debt strategy. The session will also look at the recent period of volatility in government bond markets as investors who had first sought the safety of government debt amid fears about bank failures swiftly reduce those positions amid signs of market recovery. How should debt managers respond?

ALM framework – its advantages and limitations
Speaker to be confirmed

With the Asset Liability Management framework market and financial risks can be reduced through matching assets and liabilities in terms of maturity, interest rate and currency. This session will look at how to apply the traditional private firm ALM framework to the analysis of risk of sovereign debt, its usefulness in setting benchmarks and the difficulties in defining the asset side, taking into account, in particular, the rising levels of foreign exchange reserves in many countries.

Communication with external markets and relationships with rating agencies
David Heslam
Spencer Jones, Director, Emerging Europe Sovereign and International Public Finance, Fitch Ratings and
Spencer Jones
Managing Director, Houlihan Lokey Howard & Zukin

Maintaining good relations with the private sector is essential for a successful debt management strategy. This panel session will consider how to manage such relationships, and how improved consultation with the markets can make debt management more efficient.

How to develop domestic bond market
Thordur Jonasson
Managing Director, Askar Capital and former Chief Executive, National Debt Management Agency, Iceland

The government debt manager benefits from a deep and liquid domestic bond market into which to issue, but it also plays a significant role in developing and supporting the market. This session will focus on how the debt manager can contribute at each stage of market development, including the importance of building benchmarks, the design of the issuance mechanism and the primary market, and what influence the debt manager might be able to exert over the secondary market.

Domestic interest rate swaps
Ove Sten Jensen
Deputy Head of Portfolio Management, Swedish National Debt Office

As debt issuance becomes more competitive and debt managers come under pressure to reduce borrowing costs, more active debt management strategies can help respond to these challenges. Similarly debt managers are increasingly being asked to take on or contribute to the management of contingent liabilities, a role for which their technical skills appear to make them particularly well qualified. The speaker will consider how Sweden’s strategy has recently evolved to become more active, and also consider balance sheet issues that arise from contingent liabilities and the key requirements for the debt manager to be able to successfully take them on.

A case study: Hungary
András Réz
Head of Planning, Research and Risk Management, Government Debt Management Agency Ltd. (ÁKK), Hungary

Today, Hungary’s government securities market is one of the most developed, liquid and sophisticated among transition countries. Starting with a negligible stock of Treasury bills in the early 1990s, the domestic market has significantly deepened as the range of instruments diversified and the maturity extended. András Réz will share the experience ÁKK has in developing the domestic bond market ‘from scratch’ and draw out the lessons learned in the process.

Next steps in bond market development
Workshop led by the chairman, Ian Storkey

In this session, delegates will be split into groups and asked to consider key features of their own bond market, identify at what stage of development it is at and, together with the other group members, propose priorities for action.

Coordination of cash management and debt management
Mike Williams

Independent consultant and former Chief Executive, UK Debt Management Office Debt managers are increasingly required to act as ‘Treasury’s treasury’, and take responsibility for cost-effective management of government cash flows. When cash management is done well it reduces costs, supports debt management, and benefits monetary and other financial policies. The speaker will discuss policy issues arising and how to secure the benefits from the integration of debt and cash management.

Effective performance measurement
Led by the chairman, Ian Storkey

Measuring debt management performance is necessary to ensure transparency and accountability of debt management policies and operations and to ensure that debt is being well managed. Over the past few years, a number of tools and methodologies have been developed to assess the performance of DMOs. Ian Storkey will introduce assessment tools that have been developed and the role that the Supreme Audit Institutions can play in assessing debt management performance.