FRANCE - The French government last week significantly expanded the worldwide market for inflation-indexed bonds by issuing the first true Euroland-based inflation-indexed bond.
Though the issuer and credit of this inflation-indexed bond is France, the bond has been issued in euros and will pay out based solely on the Euroland-wide harmonised Consumer Price Index inflation rate (excluding tobacco prices, due to the fact that tobacco prices are under government control).
According to US-based asset managers Bridgewater Associates, this is an important development in the growth of the inflation-indexed bond market as a global asset class since all prior inflation-indexed bond issues were tied solely to domestic consumer price indexes, and therefore tended to draw demand mostly from investors inside of France, Sweden, and the UK.
The new Euroland-based inflation-indexed bond issued by France today will draw demand from all across the 11 countries inside Euroland that until now had no domestic inflation-indexed bond market. Only about 27% of the new bond went to France-based investors.
Bridgewater said: The French government had hoped to issue a minimum of about EUR3 bn worth of the new bonds with a target of about EUR5bn. This was based on an expected real yield of about 3%. As it turned out, the French generated a book of demand for about EUR9.4bn worth of bonds at today’s initial sale, prompting the French Treasury to expand their target sale from EUR5bn up to EUR6.5bn at a real yield of 2.98%.
The Pensions Regulator (TPR) and Labour MP Stephen Kinnock and will listen to the experiences of steelworkers when transferring their pensions away from the British Steel Pension Scheme (BSPS) next week in Port Talbot.
Just Group has acquired a 75% stake in the holding company of Corinthian Pension Consulting in a bid to strengthen its professional defined benefit (DB) advisory services.
The Pensions Regulator (TPR) has exercised its production order power under the Proceeds of Crime Act 2002 for the very first time as part of a fraud investigation.
The ITN Limited Pension Scheme has named Trafalgar House as its administrator for an initial term of five years.