Austria Leads Sovereign Trio Getting 65 Billion-Euro Bond Orders

(Bloomberg) -- Investors placed more than 65 billion euros ($74 billion) of orders in three sovereign bond sales, with Austria getting the biggest book and a high-yield Greek note also seeing strong demand.

Austria got more than 28 billion euros of bids, just topping Belgium’s 27 billion euros, according to separate people familiar with the offerings, who asked not to be identified as they aren’t authorized to discuss the matter publicly. Both countries were selling 5 billion-euro deals. Greece had 10 billion euros of orders for a 2.5 billion-euro note, a person said.

Euro investors have flocked to sovereign notes in recent weeks as a dovish turn from central banks has lessened concerns about potential interest-rate increases later in the year. Tuesday’s deals will push January euro sovereign sales to almost 52 billion euros, surpassing the 47.7 billion euros sold in the opening month of 2018, according to data compiled by Bloomberg.

“An environment of less hawkish central banks, low volatility and weaker macroeconomic indicators favors carry trades and the market was not positioned for that in the final months of 2018,” said Ioannis Sokos, a fixed-income strategist at Deutsche Bank AG in London. “These syndications are seen as an opportunity to achieve these adjustments.”

All three sovereign issuers were able to tighten pricing versus initial targets. Austria set a final spread of 19 basis points below midswaps on its 10-year deal -- a rare example of a sovereign borrower getting lower costs this year than last year.

To contact the reporters on this story: Hannah Benjamin in London at hbenjamin1@bloomberg.net;James Hirai in London at jhirai3@bloomberg.net

To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net, ;Hannah Benjamin at hbenjamin1@bloomberg.net, Neil Denslow, Scott Hamilton

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