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Debt Management Directorate

Role and function

The Debt Management Office (DMO) is a Directorate operating within the Treasury Department. Established in December 2006, the Directorate is responsible for the operational dimensions of debt and cash management for the central government and for providing specified funding requirements as authorised by Parliament.

The principal objective of the Directorate in its debt management activity is to raise funds as well as carry out other financial transactions in such a way as to ensure that:

 The central government borrowing programme (short and long term) is financed prudently and cost effectively consistent with an acceptable level of risk; 

 The annual debt servicing costs are met at the lowest possible cost; 

 The development of the domestic financial markets is given the necessary support; and 

 The liquidity of government funds is adequate to meet government’s financial commitments/obligations as and when they fall due.

The organizational structure of the DMO reflects international standards. In line with this practice, the DMO is divided into a Front, Middle and Back Office to ensure a clear division of responsibilities.

The Front office executes government debt policy regarding the issuance of government securities, the Middle office undertakes market research and analysis, while the Back office deals with registration and administration and settlements of central government debt.

Legal framework for borrowing

The Minister of Finance on behalf of the Government of Malta can borrow funds both locally and abroad up to a maximum amount and for those purposes as provided and authorised by an Act of Parliament for the time being in force in Malta.

All central government borrowing is carried out through the Treasury by the Debt Management Directorate (DMO). Nevertheless, the foreign loans are negotiated by the Ministry of Finance while the recording and servicing of such foreign loans is undertaken by the DMO.

In practice, all domestic borrowing by the central government takes a wide range of forms, from the issuing by way of public offer of long-term marketable securities - Malta Government Stocks - to the issuing of short-term Treasury bills. On the other hand, all foreign borrowing has to-date taken the form of bilateral loans negotiated with foreign governments, international organizations or other foreign institutions usually undertaken to finance specific projects.

Under the Constitution of Malta, article 106, the public debt of Malta, including the interest payment thereon, sinking fund payments and redemptions in respect of that debt, is a charge on the Consolidated Fund and other public funds of Malta.

The statutory basis for central government borrowing is set out under the following primary and subsidiary legislation:

 Malta Treasury Bills Act, Chapter 133 (relating to the issue of short-term borrowing up to 12 months maximum maturity);

 Malta Treasury Bills (Dematerialisation) Regulations, 2007;

 Local Loans Ordinance, Chapter 161 (relating to terms and conditions applicable to loans authorised to be raised locally by the issue of stock in Malta);

 Local Loans (Registered Stock) Regulations, S.L. 161.01;

 Development Loan Act Cap 229 (in respect of bilateral loans raised outside Malta);

 Government Borrowing and Granting of Loans to the Hellenic Republic Act, 2010 (Act III of 2010) as amended by Acts XVIII of 2011 and III of 2012;

 Government Borrowing and Granting of Loans to Air Malta plc, 2010 (Act XVIII of 2010);

 Budget Measures Implementation Act, (Act XV of 2016) – It is an annual budget law that authorises the Minister of Finance to raise loans on behalf of the government for an established amount during the financial year by the issuing of securities and provides also the main purposes for which government can apply such borrowing.

 
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CONTACT INFORMATION:
 
Contact Name
Treasury Department
Development House
Level 2 and 3
St. Anne Street
Floriana FRN9010
 
Telephone
(+356) 2596 7100
(+356) 2596 7157
(+356) 2596 7179
 
Fax
(+356) 2596 7203
 
Email
 
Website