Germany COVID-19 Issuance expansion

April 13, 2020

Econoday’s Sovereign Debt Calendar is crowded! COVID-19 has increased issuances. Last week it was the United Kingdom, this week it is Germany with its own major coronavirus issuance expansion. In a second adjustment to the issuance calendar to finance the Government package of measures to cope with the coronavirus pandemic, Germany’s Finanzagentur will further expand its issuance activities both for money market instruments and for nominal capital market instruments during the second quarter and the second half of 2020.

Compared with the adjustment to the issuance schedule published on March 23rd, when previously announced bubill auction volumes were raised to €4 billion each and three 12-month auctions were added to the calendar while previously announced auction volumes on capital market instruments were adjusted upward for a total auction volume increase of €32.5 billion during the second quarter, the new adjustment will increase total auction volume for the second quarter by another €43 billion to €130.5 billion (original 2020 Calendar plan for the quarter was €54 billion).

In the new second quarter expansion, the issuance volume of Federal Treasury discount paper (Bubills) will increase by €32 billion to €72 billion, via six multi-ISIN auctions beginning on April 20th on the five existing issuance dates as well and a new May 4th issuance date, as well as an additional single 12-month Bubill auction on June 29th. Nominal capital market instruments via auctions in the second quarter will be raised by another €11 billion to a total volume of €58.5 billion. This increase will be carried out largely with the introduction of two brand new maturity segments, 7-year and a 15-year federal bonds.

For the second half of 2020, Finanzagentur said the outlook for further issuance increases is still uncertain, but from today’s perspective, it plans to expand the auction volume of nominal Federal securities in the second half of the year by a further €66.5 billion versus the issuance outlook published on March 23rd, when total planned issuance for the second half was increased by €87 billion. Total planned auction volume for the second half of 2020 thus currently stands at €254.5 billion, a 152 percent increase from the €101 billion indicated for the second half in the original 2020 Calendar published in December.