FRANKFURT (MNI) – The German government left its bond and bill
issuance in Q2 unchanged, the country’s Federal Finance Agency announced
Thursday.

The announcement means that as indicated last December, Germany
will issue E53 billion in capital market bonds in Q2, while it will
issue E30 billion in money market operations.

The Finance Agency generally tries to be as predictable as
possible. Any changes to the calendar would have thus been a surprise,
especially given there have been few momentous events this year that
have shaken, for better or worse, Germany’s financial situation.

The bond market season kicks off on April 6, when Germany taps its
2-year Schatz for E5 billion. Germany first launched this security with
a coupon of 1.5% on February 23 and then tapped it on March 16. The
April tap will bring total volume for this Schatz to E18 billion.

The next auction will be on April 13, a tap of Germany’s 3.25%
coupon 30-year Bund for E2 billion. The agency most recently tapped this
security on January 26. Back then, the security saw weak demand, with a
bid/cover ratio of only 1.2. The auction was technically uncovered,
meaning total bids did not match the desired volume.

The security’s initial auction July 21 also resulted in a
technically uncovered auction. Record-low yields may have kept investors
on the sidelines, an Agency spokesman told MNI at the time.

The upcoming tap in Q2 will bring total volume on this security to
E8 billion. Thus far, the agency plans to tap the security in July,
again for E2 billion, and once more in October for another E2 billion.

On April 20, Germany will launch its first new capital market
security of Q2, when it premiers a 5-year Bobl at an intended volume of
E6 billion. It intends to top up that security twice, once on May 18 for
E6 billion and then again on June 29, to close out the quarter, also for
E6 billion.

Two more new issues follow the Bobl on the calendar. On April 27,
the agency will launch a 10-year Bund with maturity on July 4, 2021 and
a total volume of E6 billion. This will be re-opened once on May 25 for
E5 billion and again on June 22, for E4 billion.

The last of the new issues will be on May 11, when Germany launches
a Schatz coming due on June 14, 2013. This is to be tapped once in Q2,
on June 15, for E6 billion.

The government reiterated that it intends to issue E2-E3 billion in
inflation-linked, or linker, bonds this quarter. In Q1, it issued E3
billion. The recent tendency is for a linker to be announced on the
first Friday of the month, with the sale being the following Wednesday.

Germany again repeated that it “reserves the right to issue foreign
currency bonds, as market conditions allow.” Germany has, however, not
done this since September 2009, when it borrowed in dollars. That was
the country’s first dollar-denominated bond in four years.

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

[TOPICS: M$G$$$,M$$FI$,MFXBO$,MGX$$$]