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EGB Supply For W/C Sep 13, 2021 (1/2)

EUROZONE ISSUANCE

The Netherlands, Italy, Germany, Spain and France have auctions scheduled this week while the EU has an NGEU syndication scheduled. We look for E36.0bln of gross nominal issuance, up from E12.4bln last week.

  • The Netherlands will kick off issuance for the week tomorrow morning with E1-2bln of the 30-year 0% Jan-52 DSL on offer.
  • Italy will then look to sell up to E5.75bln of on-the-run 3/7/30-year BTPs: E1.5-2.0bln of the 0% Aug-24 BTP, E1.5-2.0bln of the 0.50% Jul-28 BTP and E1.25-1.75bln of the 1.70% Sep-51 BTP.
  • Also tomorrow, Germany will come to the market to sell E5bln of the 0% Sep-23 Schatz.
  • We expect the EU's NGEU syndication to take place tomorrow, with a mandate likely released today. We had previously noted that we thought there is appetite for a dual-tranche syndication in September and would expect either the 3/7-year to be launched alongside the 15/25-year. However, since the EU confirmed that it can launch new issues via auction (as well as via syndication) and that it can auction more than one bond at a single auction, we think it is less likely we will see the 3-year launched via syndication. We now favour either a dual-tranche 7-year alongside a 15/25-year issue or one of these maturities via a single tranche transaction.

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