France taps 4 OATs...........>

FRANCE AUCTION PREVIEW: France taps 4 OATs Thursday for a fairly decent

E8.0-E9.0bln indicative size. On offer are OAT 0.5% May-26, OAT 0.75% May-28,

OAT 4.5% Apr-41 and OAT 2.0% May-48, so potentially a lot of duration. 

- BACKGROUND: No coupon or redemption flows to help, although E13bln of a French

bond redeemed on Monday past. The French AFT tends to always issue at total at

the top of the target range. 

- RV: The off-the-run OAT 4.5% Apr-41 would be directed at either a dealer short

or life insurers, it looks cheaper to a spline curve than slightly shorter 15Y

paper.  The other off-the-run, the May-26 looks expensive to the spline curve,

although comparing swap spreads gives a slightly different result. Most interest

should be on the 0.75% May-28 but this no longer looks cheap to Germany

following a mini-rally in the periphery and semi core. Some have suggested

shorting Italy vs France ahead of the weekend election.

- RESULTS: Nominal bidding closes at 0950GMT. Results are due around 1000GMT