Deutsche Bundesbank announces first 20-year federal bond
The Deutsche Bundesbank announced the issuance of Germany's first 20-year federal bond today. The bond, issued via a syndicated procedure, carries an interest rate of 3.4 percent and has a maturity until May 15, 2047.
Syndicated issuance for broad investor base
The federal government today issued its first 20-year federal bond through a syndicated procedure, rather than the traditional tender process.
The bond carries an interest rate of 3.4 percent and will be valued on February 3, 2026, with maturity set for May 15, 2047. The issuance volume totals €6.5 billion, which includes a market-making quota of €1.0 billion.
This quota will be utilized by the Finanzagentur to support liquidity in the secondary market.
A consortium of leading banks, including Barclays, BNP Paribas, Citi, Deutsche Bank, J.P. Morgan, and Morgan Stanley, managed the placement with national and international investors.
The reoffer price was set at 99.921 percent, corresponding to a reoffer yield of 3.404 percent.
The deviation from the standard issuance conditions was established within the syndicated procedure.
Key features of the new long-term bond
The new 20-year federal bond, identified by ISIN DE000BU2T000, marks a significant addition to Germany's debt portfolio.
Its first interest payment is scheduled for May 15, 2027, constituting a long first coupon.
The bond's terms also allow for 'stripping,' enabling the separation of capital and individual interest claims.
The decision to issue via a syndicated procedure deviates from the standard tender procedure outlined in the issuance conditions of December 21, 2012. These specific conditions and the procedural deviation were determined during the syndicated process and are officially announced by the Bundesbank through this press release, forming an integral part of the bond's issuance conditions.