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Short-term debt securities

Australian System of National Accounts: Concepts, Sources and Methods
Reference period
2020-21 financial year

Definition

15.91    Short-term debt securities are those with an original term to maturity of one year or less. For Australia, most short-term debt securities on issue are discount instruments (the issue value is lower than the face value, the difference representing interest payable) with an original term to maturity ranging from 30 to 180 days.

15.92    Issuers of promissory notes and bills of exchange may negotiate rollover facilities which allow them to use these instruments as sources of floating-rate long-term funds. In the ASNA, the existence of rollover facilities is not treated as converting what are legally short-term instruments into long-term instruments. The ASNA classifies the instrument according to the contracted term at the time of the original drawdown, rather than anticipating use of the rollover facility.

15.93    Apart from promissory notes, short-term securities are traded on well-established secondary markets. Treasury Notes are inscribed, but the other instruments in this category are bearer securities.

15.94    There are two types of short-term securities presented in the ASNA:

  1. bills of exchange; and
  2. one name paper.

Bills of exchange

15.95    The 2008 SNA uses the term ''bankers' acceptance'' to describe the instrument known in Australia as a bill of exchange. A bill of exchange is an unconditional order drawn (issued) by one party, sent to another party (usually a bank) for acceptance, and made out to, or to the order of, a third party, or to bearer (holder). It is a negotiable instrument with an original term to maturity of 180 days or less. Almost all bills are bank accepted or endorsed because investors expect bills to be the obligation of a first-class credit.

15.96    The bill of exchange represents an unconditional claim on the part of the holder and an unconditional liability on the part of the accepting bank; the bank's counterpart asset is a claim on its customer. As such the ASNA shows two instruments in order to demonstrate each side of this three-way transaction. Bills of exchange are treated as financial assets from the time of acceptance, even though funds may not be exchanged until a later stage.

15.97    Bills of exchange are used in international trade finance, liquidity management by banks, money market dealers and corporate treasuries. The data cover only those bills accepted by Australian residents.

One name paper

15.98    By contrast with bills of exchange, one name paper is the liability of a single issuer and does not rely on the credit enhancement provided by acceptance. The ASNA data are further classified by ''domicility''; that is, the market into which the issue was made, being in Australia or offshore.

15.99    One name paper includes promissory notes, Treasury Notes and negotiable certificates of deposit issued by banks.

15.100    A promissory note — also called commercial paper — is a written promise to pay a specified sum of money to the bearer at an agreed date. It is usually issued for an original term between 30 and 180 days and is sold to an investor at a simple discount, to the value shown on the face of the document. A promissory note is not accepted by a bank and, unlike a bill of exchange, is not endorsed by the parties which sell it in the market.

15.101    Treasury Notes are inscribed instruments issued by the Commonwealth Government, and have an original maturity of five, thirteen or twenty-six weeks.

15.102    Bank certificates of deposit are similar to promissory notes except that the drawer is a bank rather than (say) an industrial company. Bank-issued certificates of deposit with an original term to maturity of one year or less are called negotiable certificates of deposit.

Sources and methods – quarterly

15.103    The tables below outline the data sources and methods used in the estimation of quarterly short-term debt securities in current prices. The estimates are valued at market prices. Real estimates are calculated for the national balance sheet.

15.4 Quarterly short-term debt securities – Bills of exchange
ItemComment
Banks acceptances
 Data for bank accepted bills of exchange is sourced from APRA's monthly Bank Bills Acceptances and Endorsement form.
Holdings of banks acceptances
 The counterparty assets holders for bills of exchange are obtained from the suite of balance sheet forms from the ABS Survey of Financial Information and the APRA Economic and Financial Statistics (EFS) collection.

The total reported holdings of bank-accepted bills, is adjusted to align with the reported acceptances by banks.

A residual asset holding of bills of exchange is calculated as total bank bills of exchange acceptances less the sum of total assets held (from the ABS and APRA forms). The residual is allocated to the household and rest of the world sectors, but other sectors may be adjusted due to reporting errors, incorrect classifications, under coverage or conflicting data sources.
Transactions and price change
 Price change effects for these instruments are small in aggregate due to the short-term nature of the contracts. In practice, transactions are derived from stock levels.
15.5 Quarterly short-term debt securities – One name paper
ItemComment
One name paper issuance by domestic sector and subsector
 Data for one name paper are sourced from APRA's EFS authorised deposit-taking institution and Registered Financial Corporations Debt Securities Issued forms, and the suite of balance sheet forms from the ABS Survey of Financial Information.

Supplementary data sources from the Reserve Bank of Australia (RBA); the Australian Office of Financial Management and Reuters.
Holdings of one name paper by issuing sector and subsector
 The counterparty assets holders for one name paper are obtained from the suite of balance sheet forms from the ABS Survey of Financial Information; returns under APRA's Economic and Financial Statistics (EFS) Statement of Financial Position and Debt Securities Held forms; and the ABS Survey of International Investment.

The total reported holdings of one name paper are adjusted to align with the reported issuance of one name paper.

A residual asset holding of one name paper is calculated as total one name paper issuance less the sum of total assets held (from the ABS and APRA forms). The residual is allocated to the household sector, but other sectors may be adjusted due to reporting errors, incorrect classifications, under-coverage or conflicting data sources.
Transactions and price change
 Price change effects for these instruments are small in aggregate due to the short-term nature of the contracts. In practice, transactions are derived from stock levels.
Rest of the world
 The main data source for one name paper issued by the rest of the world and the respective counterparty asset holders are obtained from the ABS Survey of International Investment.

Price changes are obtained directly and modelled, mainly related to foreign currency. Transactions are derived by applying price changes when not directly available from source data.