Belgium to tempt investors with new 30-year bond

Belgium is taking advantage of a back-up in yields and a stable market backdrop to offload a long-awaited new 30-year bond on Tuesday, reports Reuters’ John Geddie. The new June 2045 benchmark euro bond, named OLO 71, is being marketed to investors with initial price thoughts at mid-swaps plus 115bp area, equivalent to a 3.95% yield at current market levels. Barclays, BNP Paribas Fortis, JP Morgan and Société Generale are managing the syndicated sale, and aim to price the bonds later on Tuesday. "The immediate response has been very encouraging and I'd be surprised if it was smaller than €3bn," said one bank managing the deal. Uncertainty around the US Federal Reserve tapering its quantitative easing programme has seen global government bond yields shoot up over the last months. 10-year Treasury yields have sold off over a point since the start of May, topping 3% last week, the highest level since July 2011. France was the last European country to issue a new bond with a 2045 maturity back in March this year. That bond priced with a reoffer yield of 3.26%, and was tapped last week at a yield of 3.6%. On Tuesday, those bonds were bid at 3.664%, according to Tradeweb data. Demand for Belgium's new bond will also be driven by the fact that there will be fewer opportunities for investors to get their hands on the bonds during the rest of the year, as it has already issued 86% of its annual funding programme, said the lead manager. The new issue is also offering a 6bp new issue premium to its outstanding bond curve, according to the lead. Earlier on Tuesday, the issuer announced that a planned auction scheduled for September 30 was cancelled.