FRANKFURT (MNI) – The German government has reduced its bond and
bill issuance for the third quarter of this year to a combined E60
billion from the previously announced E71 billion in December, the
country’s Federal Finance Agency reported on Tuesday.

The announcement means that Germany will issue E39 billion in
capital market bonds in Q3 instead of E41 billion, and E21 billion
in money market operations rather than the previously-reported E30
billion.

July 6 marks the beginning of the debt issuance season, when
Germany will tap its 2-year Schatz for E4 billion, down from E5 billion
previously announced. Germany first launched this security with a coupon
of 1.75% on May 11 and then tapped it on June 15. The tap in July will
bring total volume for this Schatz to E17 billion.

The next auction will be a tap of Germany’s 3.25% coupon 10-year
Bund for E4 billion. The agency most recently tapped that security on
June 22. With July’s planned top-up, the total volume on
this security will come to E19 billion.

The debt agency confirmed a E2-billion top-up of its 30-year,
3.25%-coupon bond on July 20, which would bring the total volume on
that security to E8 billion so far for the year. A further tap is
scheduled for October, also for E2 billion.

On August 17, Germany will launch its first new capital market
security for the third quarter, when it premiers a 2-year Schatz with an
intended volume of E7 billion. It intends to top up that security once
on September 14 for E5 billion.

Two more new issues follow the Schatz on the calendar. On August
24, the agency will launch a 10-year Bund with maturity on September 4,
2021 for a total volume of E6 billion. This will be re-opened once on
September 21 for E5 billion and again in October, also for E5 billion.

The last of the new issues will be on September 28, when Germany
launches a Bobl coming due on October 14, 2016. This is to be tapped
once in Q4, in November, for E6 billion.

The government reiterated that it intends to issue E2-E3 billion in
inflation-linked bonds this quarter.

Germany again repeated that it “reserves the right to issue foreign
currency bonds, as market conditions permit.”

–Frankfurt bureau: +49-69-720 142; email: frankfurt@marketnews.com —

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