Background information

The government proposes to restore the Government bond fund with a limit of up to NOK 50 billion. The largest Norwegian companies largely borrow money in the credit bond market. In the near future, many of these companies will need to secure financing in this market. However, the bond market's ability to provide credit has diminished substantially in recent weeks. Liquidity is low and risk premiums are high. Previous experience has shown that the Government bond fund can contribute to a more efficient market for credit bonds. This will make it easier for the big companies to get the liquidity they need in the difficult situation created by Covid-19.

Content of measure

The Government Bond Fund shall be used for the purchase of bonds in the market. It is established with an investment limit of up to NOK 50 billion. The presence of the fund is intended to encourage other investors to participate in the bond market as well. The Government Bond Fund’s Investments in new credit bond loans will be made in cooperation with other investors and on market terms. Within a mandate set by the Ministry of Finance, the National Insurance Scheme Fund (Folketrygdfondet) will decide on which bond loans to invest in. The mandate of the Fund instructs management to seek to achieve the highest possible return on costs over time and at the same time contribute to increased liquidity and capital access to the credit bond market in Norway, within the framework that applies as for the management of the Fund. The return is measured in Norwegian kroner. In its exercise as creditor, the management of the fund shall have as its overriding objective to protect the financial interests of the fund.

Use of measure

SOF was established on 27 March 2020 with a framework of NOK 50 billion (€4.26 billion). On the same day, Folketrygdfondet, which managed the fund, made its first investment. The purpose was to contribute to increased liquidity and capital access in the bond market by purchasing interest-bearing instruments issued by Norwegian companies. By the December 2024, a total of over NOK 9.1 billion (€780 million) was invested, generating a profit of NOK 957 million after costs. The investments were made on market terms, and no benchmark index was established for the fund.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Larger corporations	Does not apply to citizens

Actors and funding

Actors	Funding
National government	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Direct consultation outside a formal body	Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

• Social partners jointly
• Main level of involvement: Peak or cross-sectoral level

Involvement

Consulted in connection with the government's implementation of crisis measures.

Views and reactions

Social partners have been consulted regularly during design and implementation of the measure.

Sources

• 20 March 2020: Prop. 58 LS (2019–2020) Lov om statlig garantiordning for lån til små og mellomstore bedrifter (www.regjeringen.no)
• 27 March 2020: Mandat for forvaltningen av Statens obligasjonsfond (lovdata.no)
• 05 December 2024: Folketrygdfondet completes the Government Bond Fund (kommunikasjon.ntb.no)