Norway’s new corp debt fund says ready to invest

Kristin Halvorsen. Photo: Rune Kongsro.

Norway’s new $7.44 billion corporate debt fund is ready to make its first investments and will build up a portfolio over the coming year, the social insurance fund Folketrygdfondet said on March 18.

The corporate debt fund, announced by the government last month, is intended to boost liquidity in a debt market hit by the global financial crisis. 

The Ministry of Finance has laid down regulations relating to Folketrygdfondet’s management of the Government Bond Fund. The Fund has been established with a ceiling of NOK 50 billion ($7.44 billion).

“The aim is to contribute to an increased supply of capital and liquidity in the Norwegian corporate bond market. This is a continuously changing market, and this framework gives Folketrygdfondet the flexibility to adapt to the market’s changing needs. Risk limitation and market pricing considerations make it necessary to define certain minimum requirements for the investments,” says Minister of Finance Kristin Halvorsen.

The guidelines for investments in the Government Bond Fund establish that the funds shall be invested in ordinary bond loans with issuers domiciled in Norway. The Ministry’s return expectations for these investments will be expressed through the specification of a reference index.

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