The Government Bond Fund was established in March 2009 to contribute increased liquidity and capital inflow to the Norwegian credit bond market. The Government Bond Fund is placed as a capital contribution with Folketrygdfondet.
The Government Bond Fund's capital can be placed in account loans, deposits and interest bearing instruments where the issuer is resident in Norway. It cannot be invested in loans issued by the State or local governments. Up to 10 percent of the capital can be invested in accounts recievable, which by appointment shall have priority after the remaining claimants (subordinated loan). Opposite party for deposits, security loans and derivate trades may be resident i Norway as well as in USA, Great Britain, Denmark, Finland, France, Italy, the Netherlands, Spain, Sweden and Germany. The Government Bond Fund's capital shall be placed to commercial conditions. To ensure this, there is inter alia a requirement that investments shall be done together with other investors.
The part of the Government Bond Funds capital which is placed in the credit bond market, shall be placed with 25-65 percent in bank and finance and 35-75 percent in other, non financial legal, entities.
Up to 30 percent of the capital can be placed in bonds issued by companies not evaluated correspondent to Standard & Poors credit evaluating BBB- or better (Investment grade classification). The Government Bond Fund's capital cannot be invested in bonds issued by companies with credit evaluation correspondant to Standard & Poors credit evaluation CCC+ or less.
No more than 5 percent of the Government Bond Fund can be invested in bonds issued by any single issuer.
The Ministry of Finance will settle a benchmark portfolio for The Government Bond Fund when 20 percent of the capital is invested.