Germany prepares for first linker issue

The German finance agency, responsible for issuing German government bonds and managing the federal debt, will issue 10-year bonds linked to the eurozone inflation ex-tobacco index.

The agency said it would retain €500 million of the issue to maintain a liquid secondary market. Later issues may raise the final volume to between €10 billion and €15 billion and will be sold either via syndication or auction.

The agency said it wanted to create a liquid market in linkers by issuing bonds with "benchmark maturities". Linkers could become "part of the regular auction process", the agency added.

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