Fixed-Income Markets for Government IssuersLocked: included in All Access

How public-sector borrowers raise and trade debt: what sets a sovereign apart, how developed and emerging market governments fund themselves, the bills, notes and bonds they issue and why they spread them across maturities, how sovereign auctions work and differ from corporate underwriting, why on-the-run government bonds serve as benchmarks, and how agencies, regional governments and supranationals choose their funding.

1. 1. Why and how sovereigns borrowA national government borrows against its power to tax, so it is usually its country's safest and largest bond issuer; fiscal policy decides how much it borrows, and whether it is a developed or emerging market issuer shapes in which currency and at which maturities it can borrow.Locked: included in All Access12 min
2. 2. Sovereign instruments and the maturity mixSovereigns issue bills, notes and bonds, and although a frictionless world would make maturity irrelevant, rollover risk and the market's need for a liquid risk-free curve lead governments to spread debt across maturities and issue it on a regular schedule.Locked: included in All Access13 min
3. 3. Sovereign issuance: auctions and primary dealersSovereigns sell debt through scheduled public auctions rather than underwritten deals: bids are ranked from the lowest yield up until the offer is filled, and the format (single-price or multiple-price) decides whether winners all pay the cut-off yield or their own bid.Locked: included in All Access15 min
4. 4. Trading sovereign debt and benchmark bondsOnce issued, government bonds trade much like corporate bonds through dealers, but they are the most liquid bonds in their market, the newest on-the-run issues serve as benchmarks, and a large base of investors with non-economic motives lowers sovereign borrowing costs.Locked: included in All Access12 min
5. 5. Agencies, local governments and supranationalsPublic issuers below or beyond the national government fund themselves from local taxes, user fees, project revenue or member-state support, and the stability of those repayment sources decides how cheaply and at which maturities they can borrow.Locked: included in All Access13 min