Marketing Communication
Group Economics
EGB Auction Preview
Macro & Financial Markets Research Kim Liu +31 20 343 4669 kim.liu@nl.abnamro.com
Reopening DSL January 2020
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22 May 2015
On Tuesday, the DSTA will hold a penultimate tap of the DSL January 2020 for EUR 2-3bn We think the DSTA will raise around EUR 2.5bn, which would take YTD funding to over 50% The Dutch 5y benchmark offers moderate value vs the DBR January 2020 Dutch 2s5s offer good value based on historical levels and anticipated buying by the DNB Cross market we highlight the expensiveness of the BGB September 2019 vs the Dutch benchmark
Third reopening this year of 5y benchmark
auction, we aim at around EUR 2.5bn. This would bring the
On Tuesday 26 May, the DSTA will reopen its 5y benchmark
year to date funding to almost 55% of the target. Furthermore,
for the third time this year. The 5y benchmark was initially
we estimate that more than 60% of the yearly target will be
launched via Dutch Direct Auction in September of last year.
reached by the end of Q2.
For this year the DSTA has announced to increase the outstanding amount to over EUR 15bn through 4 reopenings
Relative value considerations
before 24 September 2015. The 5y benchmark has currently
After the recent sell-off, the market looks like it has entered
EUR 10.469bn outstanding, which means that on average the
calmer waters. Market conditions are still vulnerable and jittery
DSTA will need to raise EUR 2.26bn in tomorrow’s and the
but are much better than 2 weeks ago.
final reopening. The Dutch 5y benchmark was issued last year at a spread of
Auction details
+15bps over the DBR January 2020. Currently, the spread stands at around 10bps, after having touched a low at 3bps at
Auction Date
Tuesday 26 May
Timing
10:00 AM CET
Target Amount
EUR 2.0 – 3.0bn
Settlement
28 May 2015
Source: DSTA
the beginning of the year (see graph below). In the short term, the 5y Dutch benchmark has traded between 8 – 12bps range vs the German comparable. When looking at the DSL – DBR spread on the curve, the 5y Dutch benchmark is showing moderate attractiveness (see graph below).
Dutch 5y is trading in a range vs DBR January 2020
Bond characteristics
In bps Coupon
0.25%
Maturity
15 January 2020
Outstanding
EUR 10.469bn
ISIN
NL0010881827
15
10
5 Source: DSTA
Tuesday’s auction will take YTD funding to over 50% Up to now, the DSTA has issued almost EUR 24bn on the
0 Nov-14
Jan-15
Mar-15
Yld Spread NETHER 0 1/4 01/15/20 vs DBR 3 1/4 01/04/20
capital markets. The target for 2015 is EUR 48bn, which means that the DSTA is almost half way. For Tuesday’s
Insights.abnamro.nl/en
May-15
Source: ABN AMRO Group Economics, Bloomberg
Bloomberg: ABNM