EGB Supply

The EU and Finland are both due to hold syndications while Italy and Germany are the only countries scheduled to hold auctions this week. We pencil in estimated gross issuance for the week from currently announced operations at E25.0bln. However, we also think there is a good chance that we see a further ramp up in the syndication schedule with Austria, France, Greece, Portugal and Spain all having the potential to come to the market as early as this week, potentially boosting the amount on offer through the week.

• The EU will look to hold a syndication today to hold a dual-tranche long 3-year /20-year transaction. On offer will be the new Dec-27 EU-bond (ISIN: TBC ) alongside a tap the 4.00% Apr-44 EU-bond (ISIN: EU000A3K4EL9). We look for E5bln of the new 3-year and E3bln for the 20-year tap.
• Finland also announced a mandate to launch a new long 10-year Sep-34 RFGB. We wrote on Friday that we thought a Finnish syndication was upcoming, given that a formerly 10-year RFGB matured on 15 April and Finland avoided the 10-15 year area of the curve in its 16 April auction. Finland's guidance for Q2 stated that it looked to sell a 10-15 year RFGB via syndication, so a long 10-year maturity is not a surprise. We look for a transaction size of E3bln (possibly upsized to E4bln, but unlikely).
• Italy will come to the market on Tuesday with a BTP ST / BTPei auction. On offer will be E2.0-2.5bln of the on-the-run 3.20% Jan-26 BTP Short Term (ISIN: IT0005584302), E1.00-1.25bln of the 5-year 1.50% May-29 BTPei (ISIN: IT0005543803) and E1.00-1.25bln of the 12-year 1.80% May-36 BTPei (ISIN: IT0005588881).
• Also on Tuesday, Germany will look to launch the new 2.90% Jun-26 Schatz (ISIN: DE000BU22056) via auction for E5bln.
• Germany will return to the market on Wednesday with E4bln of the 10-year 2.20% Feb-34 Bund (ISIN: DE000BU2Z023) on offer.

EZ240423.pdf