German Federal Government debt issuance outlook 2017

(lifePR) ( Frankfurt, )
The German Federal Government intends to issue fixed-income Government securities with an aggregate volume of € 172 billion in 2017, comprising € 152 billion on the capital markets and € 20 billion in money market instruments, to finance the Federal Government budget and its special funds. Furthermore, the German Federal Government plans to issue inflation-linked securities with a nominal amount of between € 6 billion and € 10 billion.

Fixed income capital market instruments

The majority of the envisaged annual issuance volume during 2017 will be attributable to Federal Treasury notes ("Schaetze"), Federal notes ("Bobls") as well as Federal bonds ("Bunds").

The German Federal Government plans to raise a total volume of € 52 billion via Schaetze, in twelve auctions (each tender with an issuing volume of between € 3 billion and € 5 billion). The Schatz initially issued in November 2016, maturing in December 2018, will be increased by another € 5 billion in January 2017. Moreover, four new issues are planned in 2017, with two reopenings for every issuance. The new issue scheduled for November 2017 will only be increased once in 2017. The final outstanding volume of each such security is expected to be € 13 billion. Schatz auctions will henceforth take place on Tuesdays.

The German Federal Government plans to raise a total volume of € 38 billion via Bobls, in eleven auctions (each tender with an issuing volume of between € 3 billion and € 4 billion). Two new series of Bobls maturing in April and October 2022, respectively, are scheduled for issuance. After their initial issuance in February and July 2017, respectively, four (April 2022) and five (October 2022) reopenings are planned for the new series. As at year-end 2017, the final volume outstanding of these new series will be € 18 billion and € 20 billion, respectively.

Ten-year Bunds will be placed, to raise a volume of € 51 billion in 16 auctions (each tender with an issuing volume of between € 2 billion and € 5 billion). Two new issues of ten-year Bunds, maturing in February and August 2027, respectively, are scheduled for 2017. After their initial issuance in January and July 2017, respectively, seven reopenings are planned for each issue. As at year-end 2017, the final volume outstanding of these two Bunds will be € 26 billion and € 25 billion, respectively.

Bund issuance with a term of 30 years is planned with an aggregate volume of € 11 billion in ten auctions (each tender with an issuing volume of between € 1 billion and € 2 billion). One new 30-year Bund maturing in 2048 is planned for September 2017, with two subsequent reopenings. The issue volumes of the Bunds initially issued in 2012 (maturing in July 2044) and 2014 (maturing in August 2046) will be increased by € 3 billion and € 4 billion, respectively, during 2017.

Money market instruments

The issuance schedule provides for ten auctions of 6-month Treasury discount paper ("Bubills"), with a volume of € 2 billion each. No issues of Bubills with other maturities are planned for 2017.

Inflation-linked Federal securities

Inflation-linked securities are an integral part of the Federal Government's strategic issuance planning. They will be offered on a monthly basis throughout 2017, except in August and December. No issue of a new inflation-linked Federal security is planned for 2017.

As a general rule applicable to all Federal securities, amounts and issue dates stated in the annual preview may change, depending on the financing requirements and liquidity situation of the German Federal Government and its special funds, and/or subject to conditions on the capital markets. However, the Federal Government plans to execute the planned issuance to the largest extent possible, in order to provide market participants with a reliable orientation for their investment decisions. The Federal Government reserves the right to issue other financing instruments, depending on market conditions and the general environment.

An update concerning planned issuance activities in the second quarter will be published during the third ten-day period of March 2017.
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