Federal notes ("Bobls")

Profile

Maturity: 5 years

Income: fixed annual interest payment

Redemption: at par value

Price risk: medium

Issuer risk: very low

Federal notes (Bobls), which have maturities of five years, represent the middle of the German Government yield curve.

Bobls as a proportion of currently tradeable Government debt

Primary market

After Bunds, Bobls are the Federal Government's second most important source of funding. Two new series will be issued in 2020, too.

In 2019, € 41 bn or about 20 % of the annual auction volume (including inflation-indexed Government securities) was issued as Bobls on the capital market. As in 2018, at year-end 2019 their share of the outstanding debt amounted to around 17 %.

According to the previous year or to the 10-year Federal bonds issuance pattern there will be two new series of Federal notes again in 2020, auctioned in January (series 181) and July (series 182). All of series 181's auctions (the new issue and four reopenings) maturities amount to € 4 bn which results in a total volume of € 20 bn for this note, maturing on 11 April 2020. Series 182, maturing on 10 October 2025, will have its new issue and the first reopening in August totaling € 5 bn, each. The two reopenings in September will amount to € 4 bn, each. According to the current plan, two more reopenings of € 3 bn, each, in the fourth quarter should raise the outstanding volume to at least € 24 bn.

In 2020, the auction volume of Federal notes will thus increase by € 3 bn to € 44 bn compared to the previous year.

As a result of an increase in the Federal Government's own holdings on 16 April 2020, the auction and issue volume of Federal notes will differ by a total of € 17.5 bn euros this year. The volume of this increase was evenly distributed among seven already issued Federal notes ("off-the-run").
In detail, all Federal notes maturing after and including October 2021 (except series 181) have been increased by € 2.5 bn each.

A list of all German Government securities scheduled for reopenings on 16 April can be found in the press release of 7 April on the updated issuance calendar for the second quarter of 2020.

Bobls as a proportion of total issuance volume in 2020

In contrast to the issuance volumes of nominal bonds which already had been fixed within the issuance calendar for the whole year, the issuance amount of the inflation-linked bonds is specified on a daily basis. So in this chart their share increases during the year with each new issuance of an inflation-linked bond whereby the shares of the nominal bonds decrease slightly. Also included in this annual chart are the one-off reopenings to the Federal Government's own holdings of 21 off-the-run Federal bonds of € 2 bn, each, on 1 April and again of 32 off-the-run Federal bonds, 7 Federal notes and 1 Federal Treasury note of 2.5 bn, each, on 16 April, which increases the issuance volume but not the auction volume.

Secondary market

As at the end of 2019, Bobls accounted for € 187 bn of tradable German Government securities in circulation. Thereof each security comprised a volume of € 16 to 21 bn.

In 2019, Bobls made up about 18 % (€ 751 bn) of the trading volume in German Government securities of a representative share of the banks making up the Bund Issues Auction Group. 2018 their share amounted to about 16 % (€ 749 bn).

Currently tradeable five-year Federal notes

The terms of issue for Federal notes are available within the security master data after clicking on the corresponding ISIN.