EGB Supply

Germany is due to return to the market today alongside Belgium, who will hold a 30Y USD benchmark syndication. Spain, France and Finland are all due to hold issuance operations tomorrow. We pencil in estimated gross issuance for the week at E33.3bln (excluding the Belgian EMTN), around double the E17.0bln of last week. In addition, we have received a funding update from Ireland. We see Greece, Finland and Portugal as the most likely to hold syndications in the week. It may take a little longer past the Easter holidays for the Q2 syndication programmes to get up to speed, but given the negative cash flows seen this week, we could see some early transactions.

• Belgium announced yesterday afternoon that they will issue a new 30-year USD benchmark bond via syndication today, with IOIs having been taken yesterday with IPT at 4.25% Feb-54 + 40bps.
  • Note that in its 2024 funding plan, the BDA looked for E2.0ln to be raised from EMTNs this year. The last benchmark USD transaction was held four years ago with USD1.5bln of the 10-year 1.00% May-30 bond sold. Given the smaller take up of Bons d’Etat than expected recently, there could even be a chance that if demand is very strong today the deal is upsized to USD2.5-3.0bln. However, our base case is that we see a USD1-2bln transaction (depending on whether the BDA wants to keep its options open to launch another EMTN later this year).
  • We continue to expect a Belgian OLO syndication in May, but note the possibility it being brought forward into April. now looks unlikely. In terms of maturity a 5-6 year OLO will potentially be on offer for E5-8bln with a new Oct-30 OLO (or if not an Oct-29 OLO) as there are gaps in the current coupon curve around this area.
• Germany will then return to the market today, looking to sell E4.5bln of the 10-year 2.20% Feb-34 Bund (ISIN: DE000BU2Z023).

EZ240403a.pdf