Germany prepares for first linker issue

The German government is set to issue €5.5 billion worth of inflation-linked bonds next week. They will be the first linkers issued by Germany.

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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