MNI EGB Issuance, Redemption and Cash Flow Matrix - W/C Jan 8

• The EFSF, the EU, the Netherlands, Austria, Germany and Italy all look to hold auctions in the week ahead while we pencil in syndications from Belgium, Ireland, Italy and Spain.
• This leaves estimated gross issuance for the week at E54.2bln, up from E28.9bln this week.
• The week ahead sees only E0.5bln of redemptions (an Austrian EMTN) with no coupon payments due.
• This leaves net flows for the week at an estimated positive E53.6bln, up from E10.9bln this week.

EZ240108.pdf

Supply Next Week

• The EFSF has sent an RFP to banks regarding an “upcoming” issue. Historically this transaction normally takes place on the Monday and we pencil in 8 January. The past 3 years have seen dual-tranche syndications with increasing sizes. In 2021 E5.0bln across 10/30-years, in 2022 E5.5bln across 8/31-years, in 2023 E6.0bln across 3/10-years. MNI would expect another dual-tranche transaction and notes that there are two EFSF bonds both with E4.0bln outstanding due to mature in Q1-24 so expect there are upside risks to the E5-6bln seen over the past few years.
• The EU will look to hold a bond auction on Monday, with up to E2.5bln of the 5-year 3.125% Dec-28 EU-bond (ISIN: EU000A3K4EN5) on offer alongside up to E2.5bln of the 10-year 3.25% Jul-34 EU-bond (ISIN: EU000A3K4D41).
• On Tuesday, the Netherlands will come to the market with E2.0-2.5bln of the 6-year 2.50% Jan-30 DSL (ISIN: NL0015001DQ7) on offer.
• Austria will look to hold an auction on Tuesday with a combined E2.01bln of the 10-year 2.90% Feb-33 RAGB (ISIN: AT0000A324S8) on offer alongside the 30-year 3.15% Oct-53 RAGB (ISIN: AT0000A33SK7)
• On Wednesday, Germany will look to issue E5bln of the new Feb-34 Bund (ISIN: DE000BU2Z023). The coupon will be confirmed on Tuesday.
• On Thursday, Italy will look to hold a 3/7/15-50-year BTP auction. We look for E3.0-3.5bln of the new 3-year Feb-27 BTP alongside E2.5-3.0bln of the 7-year 4.00% Nov-30 BTP (ISIN: IT0005561888). Depending on syndication timings, there is a good chance that the 15+ BTP auction is cancelled.
• Other syndications expected in the week:
  • Belgium: 10-year expected with issue sizes generally ranging from E5-7bln. MNI expects the top half of this range (or potentially even a little larger).
  • Ireland: H1-Jan: 10-year IGB most likely. There was no 10-year benchmark launched in 2023 and we see a similarly low funding target for 2024, but there is a gap in the maturity schedule in 2034 (which wasn’t the case in 2023 regarding 2033 and also won’t be the case in 2025 regarding 2035). MNI would expect a transaction size of E3.0-3.5bln, which would see Ireland raising almost half of its 2024 funding target of E6-10bln in this transaction.
  • Italy: Expect new 15-year and new 30-year (one early January, one in February but not strong conviction which will come first). 15-year transaction size expected around E5bln, 30-year BTP transaction size expected E5-7bln.
  • Spain: Expect new 10-year Oct-34 Obli to launch in January (either W/C 8 Jan or W/C 22 Jan) for E10-13bln.