The second paper on the agenda was a 32-year bond with a remaining term of 20 years. Demand from investors was encouraging, a spokesman for the Austrian Federal Financing Agency (OeBFA) told APA on Tuesday. The longer-term bond in particular was very popular with investors, and the paper was oversubscribed by 3.86 times. “That was the highest demand at a federal bond auction since November 2023,” said the spokesman. However, the strong oversubscription was also due to the lower volume. The paper was increased today by 517.5 million euros, and the issue yield was 3.278 percent.
The green bond was also in high demand with a bid-cover ratio of 2.73. The paper achieved an issue yield of 2.839 percent, which was slightly higher than when it was issued in January (2.602 percent). The bond was increased by 920 million euros.
Little change in returns
Compared to the previous month, there was little change in yields. The ECB decision in June, in which interest rates were cut by 0.25 percentage points to 4.25 percent, did not bring any major surprises for the market, said the OeBFA spokesman.
There were stronger reactions following the announcement of new elections in France. This led to rising yields in France and, in the short term, also in Austria. In recent days, however, the situation has calmed down once more. All in all, the domestic bond market was not greatly affected by the surprise elections in France.
With today’s auction, the OeBFA has already fulfilled 70 percent of its planned financing volume for this year. According to its plan, the OeBFA wants to raise 45 to 50 billion euros this year through federal bonds. The OeBFA manages the federal government’s financial debt. In addition, it also offers legal entity financing for the federal states, the Federal Real Estate Company (BIG) or the Austrian Federal Railways (ÖBB Infrastructure).
