MNI EGB Issuance, Redemption and Cash Flow Matrix - W/C Jan 29

• Italy, Germany, Spain, France and Belgium are all scheduled to issue in the week ahead. In addition, we pencil in Belgian and Greek syndications and but see potential for other syndications to be pulled forward to this week (particularly ESM, Italian or German).
• We pencil in estimated gross issuance for the week at E46.5bln, up from E22.2bln this week, but with the return of higher redemptions and coupons.
• The week ahead sees redemptions totalling E32.7bln: E14.9bln from an Italian BTP Short Term, E17.6bln of a formerly 15-year Spanish Obli and E0.25bln from an Italian sinkable private placement as a result of Ammassi Aima.
• Coupons for the week total E8.8bln: E4.5bln Italian, E3.4bln Spanish and E1.0bln Greek.
• This leaves estimated net flows for the week at positive E4.9bln, down from E20.8bln this week.

For more see the full including an overview of the next 2 weeks of issuance, a recap of this week's issuance and tables showing cash flows over the upcoming weeks, see the PDF here:

EZ240129.pdf

Supply Next Week

• Italy will kick off auctions for the week on Tuesday with a 5/10-year BTP and CCTeu auction. On offer will be a reopening of the 5-year 4.10% Feb-29 BTP (ISIN: IT0005566408) for a maximum of between E3.0-3.5bln (as we had expected) alongside E1.0-1.5bln of the off-the-run 10-year 4.35% Nov-33 BTP (ISIN: IT0005544082), E1.5-2.0bln of the off-the-run 11-year 3.35% Mar-35 BTP (ISIN: IT0005358806) and E1.5-2.0bln of the 1.15% Oct-31 CCTeu (ISIN: IT0005554982). We had expected the launch of a new 10-year Jul-34 BTP – but we think that there is a potential that this is now launched via syndication given the strong demand at the 7/30-year BTP syndication earlier in the month.
• Germany will also look to come to the market on Tuesday to launch E5bln of the new Mar-26 Schatz (ISIN: DE000BU22049). The coupon will be confirmed on Monday.
• Germany will return to the market on Wednesday with E4.5bln of the 10-year 2.20% Feb-34 Bund (ISIN: DE000BU2Z023) on offer.
• Spain will look to kick off February issuance on Thursday with a Bono / Obli / ObliEi auction. On offer will be the 1.45% Apr-29 Obli (ISIN: ES0000012E51), the 0.10% Apr-31 Obli (ISIN: ES0000012H41), the on-the-run 10-year 3.25% Apr-34 Obli (ISIN: ES0000012M85 – for its first reopening since the syndicated launch) and the 2.05% Nov-39 Obli-Ei (ISIN: ES0000012M69). The auction size will be announced on Monday. The lack of any nominal bonds with a maturity longer than 10-years makes us more confident we will see another Spanish syndication soon. Most likely would be a new 30-year Oct-54 Obli for E5-7bln. We pencil in a possible launch in the W/C 5 February.
• France will also look to come to the market on Thursday to hold a LT OAT auction with E11.5-13.0bln on offer. We think that this will be the largest target size at a LT OAT auction (at least since the beginning of 2019). On offer will be the on-the-run 10-year 3.50% Nov-33 OAT (ISIN: FR001400L834), the off-the-run 16-year 0.50% May-40 OAT (ISIN: FR0013515806), the on-the-run 20-year 2.50% May-43 OAT (ISIN: FR001400CMX2) and the on-the-run 30-year 3.00% May-54 OAT (ISIN: FR001400FTH3).
• Cancelled auction: Note that Belgium’s auction, originally scheduled for Monday, was cancelled in lieu of the 10-year OLO syndication held on 9 January.
• Possible syndications:
  • Belgium: We pencil in a second Belgian syndication of 2024 during the week. The most likely new issue in our view is probably a new 30-year OLO. The BDA has also noted that it plans for one new medium-term OLO to be launched in the year which could potentially be launched in this window rather than the 30-year OLO. We see an Oct-30 OLO as the most likely maturity (potentially Oct-29). There is a current coupon gap in the OLO curve around this area.
  • Greece will potentially hold a syndication in the week, with a launch of a new 10-year GGB most likely. Issue sizes over past few years have generally been E3.0-3.5bln, but given the strong demand at other EGB syndications recently, we see a chance that this deal is potentially upsized.