Belgian Sovereign

A pair of oversubscribed deals at the long end of the curve in euros this week has reopened a market that has been moribund for much of the year, as investors come to terms with low yields, writes Tessa Wilkie.

Belgium on Wednesday printed the largest euro benchmark of 20 years or longer since the European Central Bank began a programme of public sector bond buying earlier this year.

Belgium has mandated for the first fixed rate benchmark longer than 20 years in the sovereign, supranational and agency sector in euros since February, while an Austrian agency also found demand at the long end of the euro curve.

The Kingdom of Belgium has more than doubled its outstanding maturity curve with a 100 year medium term note, and it is keen to issue more ultra-long debt.

The Kingdom of Belgium has more than doubled its outstanding maturity curve with a 100 year medium term note, and it’s keen to issue more ultra-long debt.

Belgium is mulling an entry to the syndicated inflation linked market — just as it sold in the structure for the first time via private placements.

A eurozone sovereign has added to what was already one of the busiest starts to a year for central government sterling issuance.

Investors flocked to the Kingdom of Belgium’s inaugural sterling benchmark on Thursday, allowing it to double its original target for the deal.

Next year’s funding picture for European sovereigns became a little clearer on Tuesday, as a pair of issuers unveiled increased debt raising burdens for 2015.

Fluxys Belgium, the gas transmission system operator, priced a €250m 15 year bond on Thursday, but demand for longer dated unrated paper was so strong that the company decided to add a €100m 20 year tranche in response to reverse enquiry.

Three issuers from France, Belgium and Germany raised €2.5bn in the covered bond market this week, and another €1bn transaction was expected from a Finnish issuer on Friday. The deals were all remarkable for the fact that the funding levels set new records for all issuers as the ECB’s allocation continued to grow, squeezing out other investors.

Infrax, the Belgian multi-utility, launched its first bond as a rated entity today, raising €250m of 15 year debt and benefiting from shedding the premium paid by unrated issuers.