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EGB FUNDING UPDATE: France 2025 Issuance Plan and 2024 Update

EGB FUNDING UPDATE
EurozoneBulletGlobalFixed Income BulletsRegionMarkets
  • France plans to issue E300bln of MT/LT OATs net of buybacks in 2025 up from E285bln this year and E270bln last year. We think that this is broadly in line with expectations. For 2024 there is no change to the OAT issuance target.
  • However, there is a notable increase in bill issuance for 2024 now with a net E35.3bln planned (up from the Budget estimate of a E5.2bln increase). This higher stock of bills will only be marginally reduced next year in the plans (by E1.5bln).
  • The 2025 figures include a financing requirement of E306.7bln and budget deficit of E135.6bln, which the AFT notes takes into account E6.5bln of amendments that the "that the Government intends to submit to Parliament during the parliamentary debates." Without these amendments, the bill issuance target for 2025 would be a E5.0bln increase in the planned stock.
  • The 2024 figures include an increase of E19.7bln in the deficit to be financed and a reduction in E7.4bln from "other cash sources" which the AFT notes is "mainly as a result of discounts at issuance." Between them these two factors contribute E29.6bln to the additional E30.1bln of planned bill issuance relative to the original 2024 Budget.
  • The chart below shows that weekly BTF auction sizes are already notably higher than they were in 2023 with the average amount sold in the first round E886mln higher than last year. As can also be seen, auction sizes from mid-July 2024 onwards have been higher than the average through the first half of the year. So the higher bill issuance target off the back of the wider deficit estimate (which itself has shown up in the monthly budget numbers) is also unlikely to be a surprise to the market. 
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  • France plans to issue E300bln of MT/LT OATs net of buybacks in 2025 up from E285bln this year and E270bln last year. We think that this is broadly in line with expectations. For 2024 there is no change to the OAT issuance target.
  • However, there is a notable increase in bill issuance for 2024 now with a net E35.3bln planned (up from the Budget estimate of a E5.2bln increase). This higher stock of bills will only be marginally reduced next year in the plans (by E1.5bln).
  • The 2025 figures include a financing requirement of E306.7bln and budget deficit of E135.6bln, which the AFT notes takes into account E6.5bln of amendments that the "that the Government intends to submit to Parliament during the parliamentary debates." Without these amendments, the bill issuance target for 2025 would be a E5.0bln increase in the planned stock.
  • The 2024 figures include an increase of E19.7bln in the deficit to be financed and a reduction in E7.4bln from "other cash sources" which the AFT notes is "mainly as a result of discounts at issuance." Between them these two factors contribute E29.6bln to the additional E30.1bln of planned bill issuance relative to the original 2024 Budget.
  • The chart below shows that weekly BTF auction sizes are already notably higher than they were in 2023 with the average amount sold in the first round E886mln higher than last year. As can also be seen, auction sizes from mid-July 2024 onwards have been higher than the average through the first half of the year. So the higher bill issuance target off the back of the wider deficit estimate (which itself has shown up in the monthly budget numbers) is also unlikely to be a surprise to the market.