France raises 2025 bond issuance to cover redemptions
PARIS, Oct 10 (Reuters) -France will raise its bond issuance next year despite a smaller budget deficit in order to cover an increase in debt needing to be refinanced, the Agence France Tresor public debt management agency said on Thursday.
Agence France Tresor said it planned to issue a record 300 billion euros ($327.6 billion) of medium and long-term bonds next year, net of buybacks, up from 285 billion this year.
The AFT said it was raising issuance next year because the amount of bonds coming due next year and needing to be refinanced would rise by nearly 20 billion euros from this year.
The overall financing requirement would nonetheless fall by nearly 13 billion euros to 306.7 billion euros next year as the state's budget deficit is set to decline next year by 31 billion euros, according to the government's budget bill presented on Thursday.
AFT said it would trim the amount of Treasury bill issuance by 1.5 billion euros next year after hiking it by 35 billion euros in 2024 to cover an unexpected increase in the budget deficit during the course of the year.
As France rolls over debt at higher interest rates, the country's debt servicing costs are set to reach 54.4 billion euros next year up from 45.8 billion this year.
AFT said it based its issuance plans on expectations that three-month bills would average 3% percent next year as the European Central Bank cuts its main interest rates.
It expects 10-year bonds to yield 3.3% at the end of this year, 3.6% at the end of 2025 and 3.7% at the end of 2026.
($1 = 0.9158 euros)
Reporting by Leigh Thomas
Editing by Alexandra Hudson
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