EU REAL ESTATE: Digital Realty Trust: Dual Tranche Final

SFIZ5 96.10/96.00ps 1x2 vs 96.15/96.25cs, bought the ps for 0.25 in 4k.

German GDP forecasts have recently seen marginally stronger Q3 estimates but a somewhat weaker profile in coming quarters, despite expectations that German fiscal impetus could be a little more front-loaded. 

• Specifically looking at median estimates from seven sellside analysts that we track, we see 3Q25 growth at 0.3% Y/Y, unchanged over the last month to 1dp (marginally higher unrounded) and +0.1pp vs three months ago.
• Revisions look a little softer further out though, easing to 0.2% Y/Y for 4Q25 (-0.1pp from last month) and 0.1% Y/Y for 1Q26 (-0.2pps from last month) - see the below chart.
• Annual forecasts remained stable further out relative to three months ago, with 2026 at 1.0% and 2027 at 1.4%, although 2026 was flattered by rounding as it's now seen close to 0.9 vs previously close to rounding up to 1.1.
• From a fundamental perspective, the analyst updates seem to show little aggregate sign of possibly more front-loaded fiscal ramp-up by the federal government than what first appeared to be the case with the initial March announcement. However, many of the much heralded structural reforms of the government continue to remain in the pipeline, with a comprehensive package now planned to be announced before the end of the year according to Finance Ministre Klingbeil. Additionally, the global competitive position of Germany may not have improved over the last months, as indicated by both external trade and industrial activity data.
• The German government meanwhile last week upwardly revised their medium-term growth forecasts, to 0.2%, 1.3% and 1.4% for 2025-27 (from 0.1% and 0.8% 25/26, the 2027 figure is new), at least partially on the back of expectations for firmer fiscal spending vs their previous estimates published in April. The updated government forecast now matches the one of a group of larger German economic research institutes on yearly headline GDP through to 2027.
• Goldman Sachs comment on their most recent GDP revision (Q3 revised -0.1pp to 0.0% Q/Q), saying "intra-European trade should continue to be resilient but the outlook for extra-European trade remains challenging as firms adjust to US tariffs, a stronger Euro, and strong competitive pressures from China, resulting in a historically weak competitive position of German firms outside of Europe".

Slovakia has announced it will be looking to sell the following at its auction next Monday, October 20:

• the 3.00% Nov-31 SlovGB (ISIN: SK4000026241)
• the 3.75% Feb-35 SlovGB (ISIN: SK4000022539)
• the 0.375% Apr-36 SlovGB (ISIN: SK4000018958)
• the 2.00% Oct-47 SlovGB (ISIN: SK4120013400)