The German government has raised its planned borrowing in the third quarter by €5 billion and will tap its 30-year, 4.75 per cent bond by that amount on July 21st, the German Finance Agency said today.
Planned bond issuance for the third quarter has been raised to €44 billion from an originally planned €39 billion, the agency said in a statement.
The news came just weeks after Finance Minister Mr Hans Eichel admitted weak tax revenues and higher-than-expected spending would force him to increase this year's new borrowing goal to at least €40 billion from a planned €29.3 billion.
Mr Marc Ostwald, bond broker at Monument Securities in London, said: "It makes sense for the German authorities to issue more of the longer-dated paper, locking into low financing rates and because investors want longer-dated paper."
The planned 30-year top-up will bring the total volume of the bond to €20 billion.
The other bond issues in the third quarter were left unchanged from the government's 2004 issuance plans announced in December.
The government plans two €8 billion top-ups of its 10-year, 4.25 per cent bond on July 7th and August 18th. It will also top up its 2.75 per cent two-year notes by €6 billion on July 14th.
Total debt issuance in the third quarter is now planned at €62 billion, up from an originally planned €57 billion. Repayments are set at €53.2 billion.