The Belgian Debt Agency has announced that the country’s gross borrowing requirement for 2023 has been lowered. In a recent funding review, it was revealed that the borrowing requirement has been reduced by €2.0 billion to a total of €49.07 billion.
This reduction is primarily due to a lower estimate of pre-funding for 2024. As a result, the Belgian Debt Agency has decreased its planned issuance of government bonds, known as OLOs, by €2.90 billion to €42.10 billion.
Despite the reduction in planned issuance, the agency has maintained the possibility to issue up to €2.0 billion under the EMTN (Euro Medium Term Note) programme. However, it plans to buy back OLOs maturing in 2024 for €0.3 billion instead of the previously planned €2.09 billion. This decision is attributed to the high price of the short-term OLOs.
The debt agency has also canceled a government bond auction scheduled for November 20. However, it will maintain the last two planned windows for optional reverse inquiry auctions initiated by primary dealers during 2023.
Looking ahead, the debt agency has stated that a renewed issuance of one-year State Note in December 2023 is possible. The issuance of this State Note, which amounted to €21.896 billion, has already resulted in a decrease of 3 to 4 basis points in the spread between Belgians OLOs and bonds from countries like France or Germany. This reduction in spread is expected to lead to lower debt servicing costs for future issuances.