MNI EGB Issuance, Redemption and Cash Flow Matrix – W/C 31 Mar

Download Full Report Here

The PDF contains a detailed breakdown of the next 2 weeks of issuance, a recap of this week's issuance and tables showing cash flows over the upcoming weeks.

• The EFSF has released an RFP, Germany, Spain and France are all due to hold conventional auctions whilst Finland will hold an ORI operation in the upcoming week.
• There is also the potential for Austrian and Italian syndications in upcoming weeks.
• We look for estimated gross issuance for the week of E30.6bln, slightly lower than this week’s E32.1bln.
• The week ahead sees a single redemption of E2.4bln from a formerly 7-year EU-bond (legacy issuance before SURE/NGEU).
• Coupon payments for the week total E3.8bln of which E2.4bln are Italian, E1.0bln are from EU-bonds and E0.2bln are from the EFSF.
• This leaves estimated net flows for the week at positive E24.4bln, broadly cancelling out this week’s negative E24.4bln.

Supply Next Week

• The EFSF issued an RFP on Wednesday regarding an upcoming syndicated transaction. We had been looking for a second syndication of the year between March and the first half of April, so this isn’t a huge surprise. The first syndication of the year raised E7bln raised in January in a dual-tranche transaction. We don’t have a strong conviction surrounding what will be on offer, but we expect the transaction to take place on either Monday or Tuesday in the upcoming week.
• On Tuesday, Germany will look to sell E4.5bln of the 2.20% Mar-27 Schatz (ISIN: DE000BU22080).
• On Wednesday, Germany will return to the market to look to sell E4.5bln of the 2.50% Feb-35 Bund (ISIN: DE000BU2Z049).
• On Thursday, Spain will hold a Bono/Obli and ObliEi auction. On offer will be the on-the-run 3-year 2.40% May-28 Bono (ISIN: ES0000012O59), the 3.10% Jul-31 Obli (ISIN: ES0000012N43), the 3.90% Jul-39 Obli (ISIN: ES0000012L60) and the 1.00% Nov-30 Obli-Ei (ISIN: ES00000127C8). We look for an upper auction target size of around E5.5-6.0bln for the nominals and a E250-750mln target range for the linker.
• Also on Thursday, France will hold a LT OAT auction. As we expected, the on-the-run 10-year 3.20% May-35 OAT (ISIN: FR001400X8V5) will be on offer alongside the first reopening of the on-the-run 30-year 3.75% May-56 OAT (ISIN: FR001400XJJ3). We had expected a further two LT OATs on offer, but only the 3.50% Nov-33 OAT (ISIN: FR001400L834) will be on offer alongside the on-the-run issues. With only three OATs on offer, we think that explains the slightly smaller auction size of E10-12bln.
• Finally on Thursday, Finland will hold an ORI operation to sell up to E0.4bln. The bonds on offer will be announced the preceding day.