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EGBS: 10-year RAGBs Underperform Semi-core Peers Following Syndication Mandate

EGBS
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The 10-year RAGB/Bund spread has widened ~2bps since this morning’s dual-tranche syndication mandate, now at 37bps. This leaves 10-year RAGBs underperforming semi-core peers (Netherlands, Ireland, Belgium, Portugal and France) intraday.

  • The timing of Austria’s first syndication had been uncertain due to questions surrounding the budget outlook. MNI had looked for a transaction this week or in the first half of February – with a lean towards the latter.
  • A new 10-year Feb-25 RAGB maturing 20 February 2035 will be launched alongside a tap of the 1.85% May-49 Green RAGB – in line with MNI’s expectations.
  • A reminder that the EU decided not to proceed with an Excessive Debt Procedure on Austria earlier this month, after negotiators attempting to form a right-wing coalition presented a E6.4bln savings plan.
  • On Jan 10, Fitch revised Austria’s outlook to Negative from Stable (rating affirmed at AA+).
  • As of Q3 ‘24, the 4Q rolling sum of the budget balance was -3.7% of GDP (vs -3.3% in Q2). Both Bloomberg analysts and the EC expect the 2024 budget balance to print at -3.6% of GDP, down from -2.6% in 2023.

 

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The 10-year RAGB/Bund spread has widened ~2bps since this morning’s dual-tranche syndication mandate, now at 37bps. This leaves 10-year RAGBs underperforming semi-core peers (Netherlands, Ireland, Belgium, Portugal and France) intraday.

  • The timing of Austria’s first syndication had been uncertain due to questions surrounding the budget outlook. MNI had looked for a transaction this week or in the first half of February – with a lean towards the latter.
  • A new 10-year Feb-25 RAGB maturing 20 February 2035 will be launched alongside a tap of the 1.85% May-49 Green RAGB – in line with MNI’s expectations.
  • A reminder that the EU decided not to proceed with an Excessive Debt Procedure on Austria earlier this month, after negotiators attempting to form a right-wing coalition presented a E6.4bln savings plan.
  • On Jan 10, Fitch revised Austria’s outlook to Negative from Stable (rating affirmed at AA+).
  • As of Q3 ‘24, the 4Q rolling sum of the budget balance was -3.7% of GDP (vs -3.3% in Q2). Both Bloomberg analysts and the EC expect the 2024 budget balance to print at -3.6% of GDP, down from -2.6% in 2023.

 

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