Several European governments have filled their boots with retail cash in the past 18 months, making the most of higher interest rates, which mean savers will get out of bed for a govvie bond again.
For Italy, Belgium and Portugal it was like stealing sweets from a baby, since banks had mostly not passed on higher rates to their depositors, leaving their customers highly temptable.
But some of the governments souped up their offers with tax breaks too, and harvested tens of billions.
Nice work if you can get it for a debt management office.
Other things being equal, diversifying the investor base should bring down the cost of funding, benefiting the taxpayer. A good number of those taxpayers also get the chance to receive some of their money back by lending to the government. Investment banks' syndicate and dealing desks may lose out, but does the government care?
Not so fast. Sovereign borrowers will always face immense pressure to raise huge sums in the most cost-effective way. But they should be wary of the risks that come with dipping in and out of the institutional benchmark bond market, including the hidden costs of doing so.
Primary dealers, of course, are disgruntled. Already shouldering the balance sheet cost of market-making in government bonds, more capital-intensive thanks to post-financial crisis regulation, banks now have to suck up losing syndication fees as DMOs turn to retail issues.
But this is not just about banks' wallets. Countries like Belgium and Portugal lowering their funding requirements can hurt the primary institutional markets they have built up and relied on for years.
If governments fail to regularly bring core benchmark deals, replacing ageing lines with new, then when they eventually need to lean heavily on institutions again, they will find their support is not cost-free. They might have to expensively reactivate these markets.
Failing to offer adequate liquidity in the primary market by topping up existing lines and regularly pricing large deals will create an illiquidity premium, which taxpayers will ultimately have to pay.
Investors like predictability. Some governments like Belgium have capped retail issues at fixed sizes to give institutions visibility. It has also recently rescinded its withholding tax break, leading to much lower subscription on its latest retail issue.
But the big retail sovereign issuers will need to pull more levers to keep the balance and avoid having to pay a premium next time they come to the institutional market.