Republic of Austria Republic of Austria Investor Information – March 2015 Austrian Treasury Republic of Austria Agenda 1. General Overview – Austria‘s favourable fundamentals 2. Funding Strategy Republic of Austria Investor Information, March 2015 3 24 2 Republic of Austria Austria – Key Data and Facts Austria Euro-Zone 84 2.758 0.5% 0.2% GDP per capita 2013 (EUR) 38.054 29.339 Net financial assets per private household (EUR) 92.615 84.750 Unit Labour Costs1 (2000 – 2013, average yearly change) 1.46% 1.68% Area (sq. km ‘000) Population growth (2013 – 2016, average yearly change) Euro-Zone (EU19) EU28 Source: Eurostat, OECD 1) in nominal terms Investor Information, March 2015 1. Austria‘s favourable fundamentals 3 Republic of Austria Austria – Key Data and Facts in % Austria Euro-Zone Real GDP growth 0.2 0.3 0.5 -0.5 0.8 1.3 Inflation (HICP) 2.1 1.5 1.4 1.4 0.4 -0.1 Unemployment 4.9 5.0 5.3 12.0 11.6 11.2 Current Account Balance 2.3 2.5 2.6 2.4 2.8 3.2 Budget Balance (Maastricht) -1.5 -2.8 -1.9 -2.9 -2.6 -2.2 Structural Budget Balance -1.3 -1.0 -1.0 -1.2 -1.0 -1.2 Debt to GDP 81.2 86.5 85.6 93.1 94.3 94.4 2013 2014 2015 2013 2014 2015 Year Source: Data on Austria: EC – Winter Forecast, February 2015 / Federal Ministry of Finance, October 2014 / Austrian Institute of Economic Research, March 2015 Data on Euro-Zone: EC – Winter Forecast, February 2015 Investor Information, March 2015 1. Austria‘s favourable fundamentals 4 Republic of Austria Austria – GDP and Exports Composition of Austrian GDP1 2014 Consumption Geographic Distribution2 Imports EUR 329 bn 74% Investments 23% Net exports 3% Exports 53% Imports 50% America 5% Africa 2% Asia 13% Exports Asia 9% Australia 0% Australia 1% America 9% Africa 1% EUOthers 10% EU-28 71% EUOthers 11% EU-28 69% Eurozone: 57.4% Eurozone: 51.3% Europe: Europe: 80.7% 79.8% Source: 1) Statistics Austria as of February 2015 2) Statistics Austria as of March 2015 Investor Information, March 2015 1. Austria‘s favourable fundamentals 5 Republic of Austria Composition of the Austrian GDP Low exposure to financial sector (4% of GDP) Other service Agriculture, forestry and fishing activities Mining and 1.3% Education; human 2.6% quarrying; health and social manufacturing work activities 11.1% 17.1% Public administration Electricity; water 4.6% supply; sewerage and waste Other administrative management and support service 2.6% activities Construction 8.3% 5.6% Real estate activities 8.9% Wholesale and retail trade 10.8% Financial Transportation intermediation 4.9% 4.0% Accommodation and Information and food service communication activities 2.7% 4.6% Source: Statistics Austria as of February 2015 Investor Information, March 2015 1. Austria‘s favourable fundamentals 6 Republic of Austria Ratings Overview Long Term Short Term Outlook Moody‘s Aaa P-1 Stable Standard & Poors AA+ A-1+ Stable Fitch AA+ F1+ Stable DBRS AAA R-1 (high) Stable Sustainability Country Rating Sustainalytics Ranked 12th out of 171 countries worldwide oekom research Ranked 8th out of 57 countries worldwide • All rating reports available online at www.oebfa.at Investor Information, March 2015 1. Austria‘s favourable fundamentals 7 Republic of Austria Austria’s High Institutional Strength Worldbank Governance Indicators 2013 2.5 2 Rule of Law Government Effectiveness Voice and Accountability Political Stability & Absence of Violence • Rule of Law: ranked 6 out of 215 countries worldwide • Political Stability & Absence of Violence: ranked 10 out of 215 countries worldwide 1.5 1 • Voice and Accountability: ranked 11 out of 215 countries worldwide 0.5 • Government Effectiveness: ranked 16 out of 215 countries worldwide 0 Note: Values range from -2.5 (weak) to +2.5 (strong) Investor Information, March 2015 1. Austria‘s favourable fundamentals 8 Republic of Austria Austria’s Favourable Fiscal Position Austria’s Government Debt Ratio lower than Euro Area and European average % of GDP 110 Forecast 100 90 80 70 60 50 40 30 20 10 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Austria Euro area EU Source: Data on Austria: Statistics Austria, November 2014 / Federal Ministry of Finance, October 2014 Data on EU28 & Euro-Zone: EC – Winter Forecast, February 2015 Investor Information, March 2015 1. Austria‘s favourable fundamentals 9 Republic of Austria Austria’s Favourable Fiscal Position Budget deficit % of GDP 0 -1 -2 -3 -4 -5 -6 -7 Forecast -8 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Austria Euro area EU More details on the federal budget reform: https://english.bmf.gv.at/budget-economic-policy/The-Austrian-Federal-Budget-Reform.html Source: Data on Austria: Statistics Austria, November 2014 / Federal Ministry of Finance, October 2014 Data on EU28 & Euro-Zone: EC – Winter Forecast, February 2015 Investor Information, March 2015 1. Austria‘s favourable fundamentals 10 Republic of Austria Public Debt/GDP - Europe Euro area Non-euro area countries % of GDP % of GDP Estonia Luxembourg Latvia Lithuania Slovakia Finland Netherlands Malta Slovenia Germany Austria Spain France Euro area Cyprus Belgium Ireland Italy Portugal Greece 10.1 9.8 2013 23.6 22.7 2014e 38.2 40.4 39.0 41.3 54.6 53.6 56.0 58.9 68.6 69.5 69.5 68.6 70.4 82.2 76.9 74.2 81.2 86.5 92.1 98.3 92.2 95.3 93.1 94.3 102.2 107.5 104.5 106.4 123.3 110.8 127.9 131.9 128.0 128.9 174.9 176.3 220 200 180 160 140 120 100 80 60 40 20 Bulgaria 18.3 27.0 2013 2014e Romania 38.0 38.7 Sweden 38.6 41.4 Denmark 45.1 45.0 Czech Republic 45.7 44.1 55.7 48.6 Poland Croatia 75.7 81.4 Hungary 77.3 77.7 EU 87.1 88.4 United Kingdom 87.2 88.7 0 120 100 80 60 40 20 0 Source: Data on Austria: Federal Ministry of Finance, October 2014 Data on EU28 & Euro-Zone: EC – Winter Economic Forecast, February 2015 Investor Information, March 2015 1. Austria‘s favourable fundamentals 11 Republic of Austria Public Debt/GDP - International Forecast % of GDP 250 245.1 243.2 245.5 200 150 105.6 104.2 100 93.1 81.2 133.0 131.9 127.9 92.2 86.5 76.9 95.3 94.3 97.1 94.4 105.1 85.6 74.2 71.9 50 0 2013 Austria 2014e Euro area Germany France 2015e Italy U.S. Japan Source: Federal Ministry of Finance, October 2014 / IMF – WEO, October 2014 / EC – Winter Economic Forecast, February 2015 Investor Information, March 2015 1. Austria‘s favourable fundamentals 12 Republic of Austria Federal government - Interest payments 1990-2015 • Absolute level of interest payments relatively stable • Relative to GDP interest payments are now at around 2.2% and still well below peak levels in 1996 in Mil EUR in % of GDP 8000 7500 7000 6500 6000 5500 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 4.0% in % of GDP 3.4% 3.5% 3.0% 2.2% 2.5% 2.0% 1.5% 1.0% 0.5% 2015* 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 0.0% * Federal Budget Act (forecast) Investor Information, March 2015 1. Austria‘s favourable fundamentals 13 Republic of Austria Indebtedness of households and corporates Level of corporate and household indebtedness substantially below Euro-Zone average in % of GDP 70 Household Debt Corporate Debt1 in % of GDP 110 68 105 66 64 100 62 95 60 58 90 56 54 85 52 50 2006 2007 2008 2009 2010 2011 2012 2013 2014 AT: % of GDP 80 2006 2007 2008 2009 2010 2011 2012 2013 2014 AT: % of GDP EA: % of GDP EA: % of GDP 1 Short- and long-term loans, money and capital market instruments. Source: European Central Bank, Austrian National Bank, December 2014 Investor Information, March 2015 1. Austria‘s favourable fundamentals 14 Republic of Austria Total indebtedness of the real economy Level of total indebtedness in Austria substantially below most advanced countries Total debt in % of GDP Japan Ireland Portugal Netherlands Greece Belgium Sweden Denmark Spain France Italy United States United Kingdom Norway Finland Austria Hungary Germany Slovakia Czech Republic Poland Romania Russia Government debt Corporate debt Household debt 0 50 100 150 200 250 300 350 400 450 Source: IMF World Economic Outlook, European Commission, BIS, Haver Analytics, National Central Banks, McKinsey Global Institute Data as of 2Q14 for advanced economies (except government debt); 2013 data for other Government debt data as of end-2014: EC Winter Forecast February 2015 (for EU countries), IMF World Economic Outlook October 2014 (other countries) Investor Information, March 2015 1. Austria‘s favourable fundamentals 15 Republic of Austria Austria’s strong competitive position Current Account Balance 6.0 5.0 4.0 % of GDP Austria’s sustainable current account surplus reflects strong international competitiveness Forecast 3.0 2.0 1.0 0.0 -1.0 -2.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Austria Euro area EU Source: EC – Winter Forecast, February 2015 Investor Information, March 2015 1. Austria‘s favourable fundamentals 16 Republic of Austria Austria is an International Net Lender Net lending (+) / net borrowing (-) of the nation in % of GDP Greece Portugal Spain United States United Kingdom Ireland France Italy EU 28 net capital import net capital export Canada Furthermore Austria has a positive net international investment position (2.6% of GDP as of Q3 2014) Euro area (EA19) Finland Austria Japan Germany Netherlands -10 -8 -6 -4 -2 0 2 in % of GDP (average 2003-2014) 4 6 8 10 Source: European Commission (AMECO), February 2015 Investor Information, March 2015 1. Austria‘s favourable fundamentals 17 Republic of Austria Age-related expenditure well under control Age-related expenditure in the euro area (projected change in pp of GDP, 2010-2060) 14 12 10 8 6 4 2 Luxembourg Slovenia Belgium Netherlands Cyprus Malta Slovakia Finland Ireland Germany Spain Euro area Austria France Greece Portugal Italy Estonia 0 Austria’s pension reforms have successfully mitigated the demographical issue. Source: European Commission Ageing Report, May 2012 Investor Information, March 2015 1. Austria‘s favourable fundamentals 18 Republic of Austria Austria‘s population growth outperforms European average in % 2013 = 100 120 Belgium 115 Austria Finland 110 France Netherlands 105 EU28 100 Germany Spain 95 Portugal Greece 90 Source: Eurostat, June 2014 Population Projections (main scenario): Assumptions related to fertility, mortality, net international migration as well as the approximated values of life expectancy at birth Investor Information, March 2015 1. Austria‘s favourable fundamentals 19 Republic of Austria High Social Stability Gini coefficient after taxes and transfers 0.50 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 / Gini (at disposable income, post taxes and transfers 2010), July 2014 Investor Information, March 2015 1. Austria‘s favourable fundamentals 20 Republic of Austria Austria’s favourable fundamentals High GDP per capita and low unemployment Austria’s GDP per capita1: 4th highest in the EU Austria’s unemployment rate: 2nd Lowest in EU in % of EU-28 average in % 150 14 12 Luxembourg: 257 140 10 130 Forecast 8 6 120 4 110 2 100 2004 0 2005 2006 2007 2008 2009 2010 Netherlands Ireland Austria Belgium Finland EU 18 2011 Investor Information, March 2015 2013 2001 2003 2005 Austria Germany • GDP per capita since 2007 up from 5th to 4th rank in the EU Source: European Commission, Eurostat as of December 2014 1) in purchasing power standards 2012 2007 2009 Euro area 2011 2013 2015 EU • Unemployment rate around half of the EU-average • 2nd lowest youth and long-term unemployment rate in the EU 1. Austria‘s favourable fundamentals 21 Republic of Austria Innovation Performance Austria exceeds EU by far Youth education attainment level Community designs per billion GDP in PPS Business R&D expenditure (% of GDP) 3.2 2.8 2.4 2.0 1.6 1.2 0.8 0.4 0.0 Community trademarks per billion GDP in PPS PCT patent applications per billion GDP in PPS Medium and hightech product exports (% total product exports) SMEs innovating inhouse (% of SMEs) Innovative SMEs cooperating with others (% of SMEs) Public-private copublications per million inhabitants Austria EU Source: Eurostat / Note: values for EU normalised to 1 Investor Information, March 2015 1. Austria‘s favourable fundamentals 22 Republic of Austria Austria A Safe Haven Core-Eurozone Economy • • • Diversified and competitive economy (eg ranked 14 out of 186 countries worldwide1) 2nd lowest unemployment in EU High level of innovation - R&D expenditure 2014e: 2.8% of GDP / among Top-10 worldwide2 • Strong exports and tourism - 3rd most diversified export structure (out of 217 countries)3 • • • • • • • Sustainable current account surplus Net capital exporting country and positive net international investment position No housing bubble High savings ratio / 2nd highest percentage of savers worldwide4 4th richest country in the EU5 3rd out of 162 most peaceful countries in the world 6 Very low vulnerability to climate change / ranked 3 out of 116 countries worldwide7 1) 2) 3) 4) 5) 6) 7) Euromoney Country Risk Survey, February 2015 Research and Development Expenditures in % of GDP, March 2015 (UNESCO) UNCTAD Statistics, Concentration and diversification indices of merchandise exports, November 2014 World Development Report 2014 (World Bank) 2013 GDP per capita on purchasing power parities, Eurostat, December 2014 Institute for Economics and Peace, Global Peace Index 2014, August 2014 S&P, May 2014 Investor Information, March 2015 1. Austria‘s favourable fundamentals 23 Republic of Austria Funding 2015 – around 2% of Eurozone Total gross funding volume 2005 – 20151 40 Redemptions 35 Net funding volume 30 in bn EUR 25 20 15 10 5 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e 1) all funding instruments including 10% own quota of the Republic of Austria auctions and pre-funding Investor Information, March 2015 2. Funding Strategy Republic of Austria 24 Republic of Austria Funding 2015 - Outlook Total issuance including all instruments (RAGB, T-bills, EMTN, loans): 2015: 22-24 bn EUR 2014: 28 bn EUR (announced on Dec 5, 2013: 28–30bn EUR) RAGB issuance 2015: 15–19 bn EUR RAGB issuance 2014: 22 bn EUR (announced on Dec 5, 2013: 22–26 bn EUR) 2015: one or two syndicated issues New: FRNs under domestic law / switch to T+2 in the course of 2015 Total portfolio tenor as of end-2015: 7.5 – 8.5 years As of March 2015: around 20% of total funding program completed Investor Information, March 2015 2. Funding Strategy Republic of Austria 25 Republic of Austria High debt affordability Low interest rates, long tenors Year Average yield1 Average maturity (years) 1 2008 3.35% 8.09 2009 3.33% 8.93 2010 2.88% 9.67 2011 2.92% 10.54 2012 2.11% 14.09 2013 1.49% 10.12 2014 0.91% 8.42 1) Total annual funding Investor Information, March 2015 2. Funding Strategy Republic of Austria 26 Republic of Austria Reliable funding strategy Announced vs. executed funding programmes • Highly reliable and conservative funding announcements: Year Announcement Executed 2006 RAGB issuance 17-20 bn EUR 18 bn 2007 RAGB issuance 18-21 bn EUR 18 bn 2008 RAGB issuance 12-15 bn EUR 10 bn 2009 RAGB issuance 21-27 bn EUR 18 bn 2010 RAGB issuance 21-25 bn EUR 20 bn 2011 RAGB issuance 16-19 bn EUR 16 bn 2012 RAGB issuance 20-24 bn EUR 22 bn 2013 RAGB issuance 20-24bn EUR 22 bn 2014 RAGB issuance 22-26bn EUR 22 bn Investor Information, March 2015 2. Funding Strategy Republic of Austria 27 Republic of Austria Auction Calendar 2015 • • • Auction date Value date Jan 13 Jan 16 Feb 10 Feb 13 Mar 3 Mar 5 Apr 7 Apr 9 May 5 May 7 Jun 9 Jun 11 Jul 7 Jul 9 Aug 4 (Reserve Date) Aug 6 Sep 1 Sep 3 Oct 6 Oct 8 Nov 3 Nov 5 Dec 15 Dec 17 EUR 0.44 bn increase of 1.65% RAGB 2014-2024 EUR 0.66 bn increase of 0.25% RAGB 2014-2019 EUR 0.50 bn increase of 2.40% RAGB 2013-2034 EUR 0.60 bn increase of 1.65% RAGB 2014-2024 EUR 0.50 bn increase of 1.65% RAGB 2014-2024 EUR 0.60 bn increase of 0.25% RAGB 2014-2019 Volume and tenors are announced one week prior to the auction date at www.oebfa.at The average tenor of the outstanding debt is 8.5 years (as of February 28, 2015). A re-opening of existing issues is regularly done in order to enhance liquidity. Investor Information, March 2015 2. Funding Strategy Republic of Austria 28 Republic of Austria Cornerstones of Funding Strategy • Diversity of funding sources (geographically and by instruments) • Financial flexibility (e.g. to adress specific investor demand) • Capitalizing on scarcity value and strong fundamentals • Secondary market liquidity • Monthly auctions • 20+ RAGB primary dealers, 10 ATB dealers • One of the lowest debt rollover ratios • Conservative debt management strategy • around 95% fixed rate • < 10% short term debt • No foreign currency risk • Well-balanced maturity profile • Reliability, Transparency, stability-oriented approach • Rigorous Investor Relations Program Investor Information, March 2015 2. Funding Strategy Republic of Austria 29 Republic of Austria Debt Rollover Ratio among lowest worldwide • 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 Source: S&P Global Sovereign Debt Report 2015, March 2015 Investor Information, March 2015 2. Funding Strategy Republic of Austria 30 Republic of Austria Investor Base / 1 • About 90% of debt held by investors domiciled in Europe • Over 80% within the Eurozone1 Domestic Non-domestic Prior to introduction of EUR around 70% (=ATS) 30% After introduction of EUR around 80% (=EUR) 20% Distribution by region2 Europe (incl. Austria) 87% Distribution by category2 Banks 40% Asia 5% Asset managers 27% Americas 5% Insurance & pension funds 17% Africa 2% Central banks & int. org. 13% Middle East 1% Retail 2% Others 1% Diversified investor base with Eurozone as home market (and strong overweight by Austrian investors) Source: 1) IMF (CPIS) / Austrian National Bank 2) Austrian Treasury estimates: syndicated RAGB issues 2008-2014 Investor Information, March 2015 2. Funding Strategy Republic of Austria 31 Republic of Austria Investor Base / 2 • Federal government: at 93% mostly marketable debt • Strong domestic wealth – sustainable current account surplus – GDP per capita is more than 40% higher than EU-average • Facts – Domestic private sector savings1 gross: 566.6 bn EUR net: 400.6 bn EUR – Federal Government Debt at 197.9 bn EUR as of end-February 2015 – Nominal GDP 2014 at 329 bn EUR2 – Domestic investment funds substantially overweight Austrian government debt against common benchmarks Source: 1) Austrian National Bank - data as of end Q3 2014 2) Statistics Austria, March 2015 Investor Information, March 2015 2. Funding Strategy Republic of Austria 32 Republic of Austria Debt Portfolio – Redemption Profile Well Diversified 25 20 31.12.2013 31.12.2014 15 in bn. EUR Conservative debt portfolio: • 8.5 yrs average maturity • around 95% fixed rate • among the lowest rollover ratios worldwide 10 5 0 2071 2069 2067 2065 2063 2061 2059 2057 2055 2053 2. Funding Strategy Republic of Austria 2051 2049 2047 2045 2043 2041 2039 2037 2035 2033 2031 2029 2027 2025 2023 2021 2019 2017 2015 Investor Information, March 2015 33 0.0 Investor Information, March 2015 2. Funding Strategy Republic of Austria Source: Bloomberg 34 17.03.15 17.12.14 17.09.14 17.06.14 17.03.14 17.12.13 17.09.13 17.06.13 17.03.13 17.12.12 17.09.12 17.06.12 17.03.12 17.12.11 17.09.11 17.06.11 17.03.11 17.12.10 17.09.10 17.06.10 17.03.10 17.12.09 17.09.09 17.06.09 17.03.09 17.12.08 17.09.08 17.06.08 17.03.08 17.12.07 17.09.07 Republic of Austria 10y Yields - Austria vs. Germany Yield in % 5.0 4.5 10y Austria benchmark yield 4.0 3.5 3.0 2.5 2.0 1.5 10y Germany benchmark yield 1.0 0.5 Republic of Austria Summary • Strong credit fundamentals, diversified and competitive economy • Sound financial policies • High institutional strength • 2nd lowest unemployment in EU • Strong exports and tourism • Sustainable current account surplus • No bubble in the housing market • Conservative funding strategy • Net capital exporting country and positive net international investment position Investor Information, March 2015 35 Republic of Austria Further Information • www.oebfa.at (Austrian Treasury): auction calendar, debt portfolio, rating reports, etc. • www.bundesschatz.at (Online retail savings product) • www.bmf.gv.at (Federal Ministry of Finance): details on the Austrian budget and Financial Stability Measures • www.statistik.at (Statistics Austria) • www.rechnungshof.gv.at/berichte/bundesrechnungsabschluss.html (Austrian Court of Audit): Reports on the Federal Financial Statements (in German only) • www.oenb.at (Austrian National Bank) • www.fiskalrat.at (Austrian Fiscal Advisory Council) • www.epp.eurostat.ec.europa.eu (Eurostat) • europa.eu/efc/sub_committee (EFC Sub-Committee on EU Sovereign Debt Markets) • www.oekb.at/en/capital-market/government-bonds/pages/default.aspx (OeKB / Government Bonds page) Investor Information, March 2015 36 Republic of Austria Contact Austrian Treasury Austria - 1015 Vienna, Seilerstaette 24 Phone: (+43 1) 512 25 11- 0 Web: www.oebfa.at Reuters: AFFA01…07 Bloomberg: RAGB, AUST Martha Oberndorfer, CFA, MBA Managing Director, Treasury / Markets Capital Markets Contact: Martin Dymkowski, [email protected], ext. 46 Christoph Frömel, [email protected], ext. 44 Christian Schreckeis, CFA, [email protected], ext. 48 Johannes Stattmann, CFA, [email protected], ext. 37 Markus Stix, [email protected], ext. 22 Günther Wahl, [email protected], ext. 16 Pia Zivanovic-Amann, MBA, [email protected], ext. 47 Investor Information, March 2015 37
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