First 2011 German bond issue a success: Bundesbank

January 06, 2011 | 08:00

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Germany successfully placed its first bond issue of 2011, the central bank said on Wednesday, reaffirming its safe haven status after several operations fell short late last year.

The Bundesbank said it took in 3.916 billion euros ($5.17 billion) in exchange for benchmark 10-year Bunds at an average rate or yield of 2.87 per cent after receiving bids worth a total of 6.29 billion euros.

Late last year, three German issues of various maturities were under subscribed amid heightened tension on sovereign debt markets owing to problems in Ireland.

Investors are also wary of debt issued by Belgium and Portugal, and had begun to worry that Germany might have to stump up more cash to help bail out eurozone countries with weak finances.

Spokesman Joerg Mueller from the German Finance Agency, which manages debt for Europe's biggest economy, said: "Today's result constitutes a robust start to 2011."

Germany plans to issue bonds and shorter-term treasury securities worth a total of 302 billion euros this year, including 54 billion euros worth of Bunds.

In Paris meanwhile, HSBC bank told AFP that the first issue by the eurozone of bonds to fund its bailout of Ireland attracted demand of nearly four times the offer, with 19 billion euros bid for five billion euros worth of bonds.

AFP

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