MNI INTERVIEW: Netherlands To Issue New 5-, 10-Year Bonds

The Netherlands' 2026 total funding need is about EUR7 billion higher than this year and as part of the issuance programme the Dutch State Treasury Agency will issue a new 5-year bond due in 2031 and a 10-year bond due in 2036, agency director Saskia van Dun told MNI ahead of the publication of the country's 2026 funding outlook on Friday.

"Both of those are in the first quarter," van Dun said in an interview, but the coupon for each issuance has not been determined yet. A review into the Netherlands' two green products due in 2040 and 2044 will be published in the first half of next year. 

"Based on those conclusions, we will see what we will do with a new green bond. We can reopen existing ones in the meantime,” she said.

While the DSTA assesses that the investor landscape is "quite stable," a growing proportion of market share is made up of hedge funds. "That's a global trend that you see that hedge funds are just moving into the fixed income market." 

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The Netherland's reputation for fiscal discipline ensures its continued AAA rating, she added.

Domestic pension funds currently hold 17% of Dutch bonds, and reforms passed in 2023 mean that many of these funds are changing from Defined Benefit to Defined Contribution schemes, potentially reducing demand at the longer end of the curve. "We have a lot of conversations and discussions about whether part of [the steepening in the curve] is caused by by the pension transition." (See MNI INTERVIEW: Spain Attracting Investors Despite Budget Delay)

Nonetheless, van Dun said the 30-year auction in September went well. "Bid to cover was six times and we saw also a very good distribution from the demand, and actually the pension funds in September were still taking the same part in the long-term bonds as in the past."

Reforms to the pension system are priced into the yield curve, but the effect "is very modest."

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"Once [reform to] the debt brake was announced in Germany, we saw a little bit of steepening and wider spread, which was a very [slight] thing, because it was like half a basis point, and then later on, the tightening came back to the start, at the opening of the day." (See MNI INTERVIEW: Fiscal Concerns Overstated - Belgian Debt Chief)

When asked whether there are any plans to issue a retail product, van Dun said "in general, we don't have infrastructure in place to do this.”

"There are other countries like Belgium, well, they have this infrastructure in place," she noted, adding that "for us, it would be a really big change."