Despite only going on sale on Thursday morning, €1.15 billion worth of Belgium's special one-year State bonds have already been purchased, with several economists even predicting that up to €20 billion could be sold eventually.
For officials and analysts, this successful issuance of special one-year bonds is easing concerns over the country's soaring levels of public debt.
Debt Agency Director Jean Deboutte said that high demand for the bonds means that the Federal Government will probably not need to raise additional funds through more traditional financial instruments such as Linear Ordinary Bonds (OLOs).
"It is becoming likely that we will not carry out certain scheduled short-term borrowings," Deboutte told l'Echo. "We are going to reduce all the planned issuances. We were already expecting it."
The bonds, named after Finance Minister Vincent Van Peteghem, offer an attractive alternative to the savings rates currently provided by Belgian banks. The effective yield of the bonds is 2.81% – well above the long-term savings rate offered by most banks.
This news follows months of unease among analysts and investors over the perilous state of Belgium's public finances, but the bonds' success might show that the Belgian State has once again become a "credible alternative for private investors."
Will you buy State bonds? Why (not)? Let @Maajtee know.
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