EGB Supply for W/C Jul 12 (1/2)

This week will see heavy issuance. We estimate E38.6bln nominal will be sold via auction with the third NGEU syndication also due to be held. Issuance will comfortably exceed last week's E16.3bln.

• The third NGEU syndication (final before the summer break) will take place probably tomorrow with a mandate likely release today (an RFP for the week has already been issued). Our base case would be for a 15/20-year issue in a single tranche transaction (matching the pattern of issuance for SURE with a dual/dual/single sequence for the first three transactions). However, we also would not be surprised by a dual-tranche transaction, possibly of 3/7-year bonds alongside a 15/20-year issue. We pencil in a range from E8-15bln for the transaction.
• Auctions for the week will kick off tomorrow with the Netherlands looking to sell E1.5-2.5bln of the 3.75% Jan-42 DSL.
• Tomorrow will also see Italy launch a new 3-year BTP as it looks to sell up to E9.0bln of 3/7/15-year BTPs: E4.0-4.5bln of the new 0% Aug-24 BTP, E2.25-2.75bln of the 0.50% Jul-28 BTP and E1.25-1.75bln of the 0.95% Mar-37 BTP.
• Concluding tomorrow's auctions, Germany will look to sell E5bln of the 0% Jun-23 Schatz.