LBBW tap shows limits of private sector buying
The Bundesbank got its first chance to buy in the primary market on Monday when Landesbank Baden-Wuerttemberg priced a €250m four year Pfandbrief tap. The increase gave a fairly clear indication on the spread level at which public sector demand swamps the private sector and comes amid concern over a bond’s liquidity if the eurosystem’s ownership of a single bond hits its 70% maximum.
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