The Federal Government covers almost 100 percent of its funding needs through one-off issues in the primary market. Issuance is generally carried out by tender or auction process, in which financial institutions that belong to the Bund Issues Auction Group cam participate.
The issuance program planned by the Federal Government is announced as an annual forecast at the end of the previous year for the following calendar year. A detailed issuance calendar with exact auction dates is published in order to provide investors with the greatest possible planning certainty.
Almost the entire Federal Government's funding needs are covered by one-off issues via auction process. The exact issuance plan is published in advance for the full calendar year.
Special financing instruments such as the first 10-year and the first 30-year inflation-linked Federal bond in 2006 and 2015 were placed by the Federal government via banking consortium (syndicate). Likewise, the first 15-year Federal bond and the first (ten-year) Green Federal bond were issued via syndicate in 2020.
In addition, the Federal government also uses the syndicate for large-volume issues of established benchmark securities in individual cases - for example, in 2021 for the new issue of a 30-year Federal bond and the new issue of the second 10-year Green Federal bond.
To a much lesser extent, the promissory note loans sporadically concluded individually with financial institutions and the holdings of Federal securities sold in the wake of an auction as part of secondary market activities contribute to the financing of the Federal government.
Issuance volume (€ billion) of German Government securities
Since 2020, Treasury discount paper (Bubills) with a 12-month maturity have been the first federal security in which a triple-digit billion volume was issued. This volume was expanded again in 2021 to almost a quarter of a trillion euros. An issue volume of € 208 bn, € 30 bn lower, is planned for 2022.
In the case of conventional capital market paper, higher volumes of federal treasury notes (Schatz) and 10-year federal bonds (Bund10Y) will be issued in 2022 compared with the previous year. The issue volume of federal bonds (Bobl 5Y) and even more significantly of 15-year federal bonds (Bund 15Y) was reduced.
After two years of issuance, no new 7-year federal bonds will be issued in 2022.
The seemingly lower issuance volume of the 30-year federal bonds shows the planned issuance volume in the auction process. The two planned syndicates in this segment are not yet included here.
Since 2020, the federal government has also been issuing green federal securities: A total of €11.5 billion was placed through the issuance of the first 10-year Green federal Bond and the first Green federal Bond, followed in 2021 by the first 30-year Green federal Bond and the second 10-year Green federal Bond plus its first replenishment with a total volume of €12.5 billion. A similarly high issue volume is planned for 2022; for the time being, the chart only shows the € 4.5 bn already fixed for the increases in the auction process.
In addition, a total of 4 syndicates are planned for 2022:
- Q1: the reopening of the 30-year 2021 federal bond (2052); the syndicate took place on March 1, 2022, with an issuance volume of € 4 bn
- Q2: the reopening of the 30-year Green federal Bond 2021 (2050)
- Q3: the new issue of the second Green federal bond
- Q4: the new issue of a 30-year federal bond
Only auctions and syndications that have already been carried out are included in the analysis of issues. Increases exclusively in own holdings, as in April 2020, or of conventional twin bonds as part of the issue of Green German Government securities are not included.
Structure of issuance volumes (%) of German Government securities
The composition of the issuance volume (auctions and syndicates) from 2014 to 2019 shows a relatively stable pattern. The financing of the governmental aid measures initiated to cope with the Covid-19 pandemic already required a significant expansion of the issuance volume in the course of 2020. The financing requirements that arose in the short term were mainly covered by a significant increase in money market issues. Compared with 2019, the Bubill share of the issuance volume of all securities doubled in 2020 from around 21% to 45%. Since 2021, the total issuance volume has been split equally between money market and capital market paper.