LONDON: France was poised to price a 7 billion euro sale of 30-year bonds on Tuesday after receiving orders over five times that amount from investors in a market supercharged by expectations of more monetary stimulus by the European Central Bank.
The country's debt agency set a final price on the new May 2050 issue at seven basis points over its outstanding 2048 bonds , which closed Monday at a yield of 1.557 percent.
Demand topped 31 billion euros, according to a lead manager.
The demand matches that of a deal completed in May 2017, the lead said, a transaction that came at the height of then newly-elected President Emmanuel Macron's popularity.
This time it was anticipation of ECB stimulus that drove demand, with the central bank widely expected to announce long-term cheap loans for banks in March to boost a faltering euro zone economy.
"The market is in a real sweet spot at the moment," said Benjamin De Forton, head of public sector origination for France at BNP Paribas, one of the lead managers. "Right now, investors are buying more - the longer the better."
He said that for borrowers it was an opportunity to lock in low yields for longer, raise a large size and front-load funding, especially as future developments are tinged with uncertainty.
"That said, we do think the main drivers are the central bank and the cash availability," he said.
France is the latest in a string of euro zone countries that have been swamped with orders when tapping the market.
Demand for euro zone government bonds has appeared close to insatiable this year, with French borrowing costs near the lowest levels in well over two years. Long-dated bond sales from Belgium and Italy also drew record levels of demand.
Pricing of the French issue is expected later today via BNP Paribas, Credit Agricole, HSBC, JP Morgan and Societe Generale.
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