Federal Treasury notes ("Schaetze")

Profile

Maturity: 2 years

Income: fixed annual interest payment

Redemption: at par value

Price risk: low

Issuer risk: very low

With a maturity of two years, Federal Treasury notes (Schaetze) have the shortest maturity of any capital market instruments issued by the Federal Government.

Schaetze as a proportion of currently tradeable Government debt

Primary market

Besides Bunds and Bobls, Schaetze are one of the Federal Government's most important funding tools. As there are four new issues per year, there are eight Schaetze outstanding at any one time.

As in the previous years, four new issues of Schaetze will be carried out in 2020 – in February, May, August and November. After an initial issue with a volume of € 5 bn (February, May and November) or € 6 bn (August), the new issues reach a final volume of € 14 bn or € 15 bn after two reopenings in the following months, each. According to current planing the new issue in November of € 5 bn will have just one reopening before year-end, reaching € 8 bn for the time being. In addition, the Schatz initially issued in November 2019 was re-opened for a last time in January 2020 by € 4 bn in order to achieve a final volume of € 13 bn.

This means that in the 2020 auction calendar currently € 56 bn, € 2 bn more than in the previous year and € 5 bn more than the € 51 bn envisaged in the original annual preview, will be raised via Schaetze. The additional volumes are the result of two increased reopenings of two Federal treasury notes in April and June by €1 bn to € 5 bn, each, as well as of three reopenings in the third quarter increased by € 1 bn, each.

Due to an increase in the Federal Government's own holdings on 16 April 2020, the total auction and total issue volumes of Federal Treasury notes will differ by 2.5 billion euros this year. This difference is solely due to the reopening of the 0 % Federal Treasury note 2019 IV maturing on 10 December 21. Its reopening volume was increased by Euro 2.5 billion.

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.

Schaetze 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

Schaetze are among the most liquid securities traded on the secondary market for German Government securities. The general tendency on the primary market is to have eight outstanding Schaetze at any one time. At year-end 2019, there was an outstanding volume of € 98 bn corresponding to around 9 % of the total German Government bond volume. This corresponds in relative as well as absolute terms to the numbers of the previous years that vary around € 100 bn and 9 %. At year-end 2019 the tradable volumes of each single security (without the November Schatz whose targeted final volume wasn't achieved at year-end) amounted to € 12 to 14 bn.
Schaetze accounted for around 13 % (€ 528 bn) of the trading volume of German Government securities of the reporting member banks of the Bund Issues Auction Group in 2019. That is almost unchanged versus previous year's share but in absolute numbers less then 2018's € 595 bn.

Currently tradeable Federal Treasury notes

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