Halister News

(Bloomberg) -- Belgium to sell 4.25% 09/2021, 1% 06/2026, 1% 06/2031, 5% 03/2035 for EU2.8b-3.5b at 11:30am CET; analysts see 10Y as rich, though likely result of dealer shorts; OLOs offer value vs France, SocGen and ING say.

• SocGen (Marc-Henri Thoumin)
  • 09/2021 bond has cheapened vs 03/2022, which may help demand; 06/2026 remains at rich levels relative to the curve, expect limited interest in this issue
  • Both longer-dated issues have underperformed shorter maturities of late; expect a rebound at the long end after the auction, should support curve flattening
  • Bonds have underperformed equivalent OATs ahead of the auction, which may support demand; expect some convergence post-auction

• ING (Martin van Vliet)
  • Limited flows, richness of 2035 bond on the curve point to short base among dealers
  • 2031 offers 7bps pickup vs OATs; 2026 offers 14bps pickup vs 2025s, 5bps vs France
  • 2026s trade nearly 20bps spreads in report, indicates a short base from dealers; expect decent demand for this line

• Mizuho (Antoine Bouvet)
  • As in France, 5Y sector is cheap, 10Y is expensive; see value in owning 09/2021 on the curve; 06/2026 offers micro relative value, though sector itself is rich
  • Both long-end issues look cheap on the curve, showing signs of auction concession