–Adds on bond sale dates in graphs 8-9 to story that ran at 08:45GMT

FRANKFURT (MNI) – Germany will issue E2 Bln less in bonds and bills
in the third quarter, the country’s Federal Finance Agency announced
Thursday.

The agency also said that further adjustments, “necessitated by
favorable developments in the fiscal budget or as a reaction to
developments in the financial markets,” will be made in the fourth
quarter.

The revision cuts total capital and money market issuance this year
to E341 bln. Originally the agency had forecast total issuance of E343
when it issued its calendar last December.

For the third quarter, total capital and money market issuance will
be E77 billion.

The Q3 cuts will come from a E1 billion reduction in the re-opening
of the S157 five-year Bobl to be tapped on July 14. This will now be
tapped for E5 billion instead of E6 billion.

Germany announced the launching of a new 30-year Bund, to take
place on July 14. The first sale will be for E4 billion. This takes the
place on the calendar of a E3 billion re-opening of the July-2040
maturity 30-year Bund. That Bund’s additional re-opening scheduled for
October has been dropped, the agency said.

Another E2 billion in cuts were realized by reducing the re-opening
volume of the September 2020 10-year Bund by E1 billion to E5 billion on
September 15. In addition, the new S158 Bobl, to be released September
22, will only be sold for E6 billion, instead of the E7 billion
originally planned.

As expected, Germany will launch a new 2-year Schatz by E7 billion
on August 11, and will launch a new 10-year Bund by E6 billion on August
18.

Other expected taps include the July-2020 10-year Bund for E5
billion on July 7, and the September-2012 2-year Schatz for E6 billion
on September 8.

Germany stuck to its plan to sell E3 to E4 billion in linkers per
quarter, and it still reserves the right to issue foreign currency bonds
if market conditions allow, the agency’s release says.

As previously announced, Germany will issue E33 billion in bubills
in the third quarter.

An issuance cut had become expected in recent days, given press
reports that German net new borrowing would be lower this year than once
thought.

On Tuesday, Germany’s Sueddeutsche Zeitung, citing government
sources, reported that net new borrowing this year would be between E60
to E65 billion this year, well below the E80.2 billion earmarked in the
2010 federal budget.

On Monday, the Finance Ministry said it expected federal net new
borrowing of some E65 billion this year.

The detailed issuance calendar for the fourth quarter will be
released in the third week of September, the agency said.

–Frankfurt bureau; +49-69-720142; tbuell@marketnews.com

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