New state bonds fail to meet expectations yielding just 402.5m euros
Belgium's new state bonds have raised only 402.5 million euros, far below the 4 billion euros goal. The bonds struggled to compete with the savings promotions launched by banks and insurers in recent weeks.
Between 5 and 13 September, savers could subscribe to two new state bonds, with one- and 10-year terms. The campaign, however, was not a success, with only 10 per cent of the target raised, the Federal Debt Agency reported on Monday.
The Treasury had hoped to recover 4 billion of the 22 billion euros invested by savers last year in tax-friendly state bonds. That money became available again in early September.
Savings promotions
The yield is 50 million euros lower than the Treasury announced last Friday. The shortfall is due to the fact that subscriptions are only confirmed once the corresponding amounts have been effectively transferred by the final subscription date. Some savers may have changed their minds or encountered delays in bank transfers.
The state bonds, offering net interest of 1.93 per cent over one year and 1.96 per cent over 10 years, struggled to compete with the savings promotions launched by banks and insurers in recent weeks. Some banks are now extending their offers in a bid to entice investors.
Due to the lower-than-expected yield, the Debt Agency will now issue 15 billion euros in treasury certificates instead of the planned 12 billion. These debt securities, intended for institutional investors such as banks and insurers, are another way for the agency to borrow money on a short-term basis.
© BELGA PHOTO NICOLAS MAETERLINCK
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