EGB Supply

Germany looks to return to the market while Greece, Spain, and France all still look to hold auctions this week and Cyprus a syndication. Slovakia and Belgium came to the market Monday. We pencil in estimated gross issuance for the week at E28.5bln, up from E24.7bln last week.

• Cyprus announced a mandate to launch a new 7-year benchmark EMTN in the “near future” as well as a concurrent tender offer to buyback up to E500mln of the 4-year 2.375% Sep-28 bond (with the offer expiring Tuesday 25 June). We are unsure surrounding the timing of the launch of the new 7-year benchmark. It could come as soon as today, but equally it could be delayed until next week to see how the takeup of the tender is before committing to a size. We pencil in a E1.0bln transaction size, but with upside risks.
• Greece, will today look to hold a GGB auction with E200mln of the 3.375% Jun-34 GGB (ISIN: GR0124040743) on offer. This will be the first reopening of the on-the-run 10-year GGB which was launched via syndication for E4bln in January.
• Germany will return to the market this morning to hold a 30-year Bund auction. On offer will be E2bln of the 2.50% Aug-54 Bund (ISIN: DE000BU2D004), up from a previously announced E1bln. This increased size is instead of opening another 30-year Bund alongside the 2.50% Aug-54 Bund. We think that this is the first time that DFA has decided to only issue one Bund (when having two pencilled in at the quarterly update). The reason the DFA gave was that this was due to feedback from market participants.

EZ240619.pdf