Germany is set to sell a record amount of federal debt to boost its economy. It is a known fact that 2021 marks the second year of the coronavirus pandemic and the country’s potential debt sale will take place this year, media reports said.
In December, it was reported that the German bond yields edged down as Europe’s benchmark debt issuer developed plans for heft issuance in 2021. It already recorded a high level of bond issuance in 2020.
Germany plans to sell as much as $576 billion in bonds and bills. This is expected to exceed a previous high of 407 billion euros that were sold last year, according to the Federal Finance Agency’s provisional calendar, media reports said. The new debt sale is in response to cope with the pandemic.
Additionally, the Federal Finance Agency is also planning to sell a maiden 30-year green bond in May for 8 billion euros and a maiden 30-year conventional bond in September. The agency said in a statement “The comparatively high issuance volume is primarily a consequence of the Covid-19 pandemic.” It is reported that two of next year’s debt sales will be syndicated.
In late November, Germany’s finance minister said that the increase in levels of borrowing was expected, and that it was planning to raise new debt of 180 billion euros, which is almost double of what was initially planned for 2021. Last year, it was reported that the gap US and German 10-year yields was at 150 basis points.