HALISTER1: Surprise Belgium Syndication; 50Y May Be EU2b, 7Y EU4b: Mizuho

Surprise Belgium Syndication; 50Y May Be EU2b, 7Y EU4b: Mizuho

(Bloomberg) -- Belgium syndication was a surprise; will be the 3rd and 4th OLOs sold via syndication this year vs three announced in their 2016 funding strategy, writes Mizuho strategist Antoine Bouvet in emailed comments.
  • 50Y issue may not come as such a surprise to the market given recent trend of EUR sovereign, SSA syndications to issue longer maturities
  • Size may total ~EU2b in 50Y, ~EU4b in 7Y, some uncertainty around forecast; this would amount to ~64k 10Y bund futures equivalent in duration terms
  • New 7Y 10/2023 should trade at a spread of around +12bps to OLO 06/2023, putting it at fair value on the fitted curve
  • NOTE: Bund Futures Hit Session Low After Belgium Issuance Announcement
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Antoine Bouvet (Mizuho Financial Group Inc)

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