Euro Members Consider More Super-Long Borrowing As ECB Mulls Bond ‘Twist’ | 4/26/2018 | Staff
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LONDON (Reuters) – Belgium hopes to sell bonds with super long maturities soon, while bankers say several other euro zone governments and state-linked bodies may follow suit as the European Central Bank mulls pushing long term borrowing rates even lower.

Belgian debt agency chief Anne Leclercq told Reuters that the country is planning to sell 40- and 50-year bonds in the near future if current market conditions persist.

Window - Lines - Part - Curve - Leclercq

“If this window remains, we will certainly reopen the lines in the ultra-long 40- and 50-year part of the curve soon,” Leclercq said.

The ECB is considering buying more long-dated bonds from next year to keep euro zone borrowing costs in check, even after it stops pumping fresh money into the economy, sources told Reuters last month. The proposed plan under discussion is to reinvest the proceeds from coupons and maturing debt already held under the scheme primarily in long-term bonds.

Government - Bond - Yields - Long-end - Yield

That has pushed down government bond yields at the long-end of the yield curve and fueled speculation that borrowers could use the opportunity to issue more longer-maturity debt.

Bankers who manage bond sales for European government and government-linked borrowers said they had fielded several inquiries from clients.

Long-end - Basis - Banker - Clients

“They have asked about it, especially those who look at the long-end on a regular basis,” said one banker, who asked not to be named as she is not authorized to speak about clients.

In recent weeks, Slovakia and the German state of North Rhine-Westphalia have sold 50-year bonds for the first time while Austria tapped its ultra-long bonds.

Banker - States - Footsteps - Rhine-Westphalia

One banker said other German states could follow in the footsteps of North Rhine-Westphalia.

The euro zone’s bailout fund, the European Financial Stability Facility is also planning a bond this week which, according to bankers, is also likely carry a long tenor.

Bankers - Others - Ireland - Candidates

Bankers added that others such as Ireland were possible candidates.

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