German 30 Year Bund Auction "Unsubscribed"

Tyler Durden's picture


Earlier today, the Bundesbank tried to sneak through some EUR3 billion in long-dated (30Y) paper. It didn't quite succeed, because if one excludes the retention by the German bank which already has its hands full with TARGET2, the auction was technically a failure. As Newedge points out, without Buba retention, the launch of new 30-yr bund would have been undersubscribed which is just a polite way of saying the above. What happened is that the German debt agency sold EUR2.405b of new 2.5% 30Y Jul-44 Bund, at an average Price 101.93 and average yield of 2.41%. Of this, the Bundesbank retained 595 million as the total target was for EUR3 billion in issuance; Total non-Buba based bids were a "weak" EUR 2.747 billion. The bid/cover was modest 1.142x; with the auction tail 18 cents “further underpinning the weakness of demand." Finally, per Newedge, the new paper looked rich vs previous rolls ahead of today’s auction, “explains the sluggishness of today’s demand.” Of course, with the now daily bipolar market, had this auction taken place on Monday when Europe was again imploding, it would have been a stunning success. Instead, today is one of those risk on days. But for anyone who bought into the "safety" of German paper 48 hours ago, today they are being carted out legs first. Until, of course, the attention shifts to the disaster that is the PIIGS, and as of earlier today, the UK once more.

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Wed, 04/25/2012 - 07:14 | 2372749 Rubicon
Rubicon's picture

Vorsprung durch Technik

Wed, 04/25/2012 - 08:11 | 2372836 bank guy in Brussels
bank guy in Brussels's picture

Fascinating, brilliant uncensored biography of Angela Merkel, per John Ward's 'The Slog'.

Biography tells about the depth of Merkel's involvement as a loyal communist when she was in the old East Germany, and her manipulation of both mates and bosses, her continued dishonesty and undermining of others to get ahead.

Especially funny about her first husband Ulrich Merkel, who supported Angela while she got her doctorate, and then she left him, stealing the refrigerator in their apartment.

As the Berlin Wall fell, Merkel quickly spun 180 degrees, became pro-American, and her current husband, Joachim Sauer, has worked for the US Pentagon military-industrial complex in San Diego USA.

Angela Merkel is also a Polish citizen with a German father, Lutheran church pastor and dedicated Communist Horst Kasner, and a Polish mother, Herlind Jentzsch.

Wed, 04/25/2012 - 09:05 | 2372960 Rubicon
Rubicon's picture

What happened to the fridge?

Wed, 04/25/2012 - 07:15 | 2372751 LongSoupLine
LongSoupLine's picture


I'm sorry, we're you talking about something with substance, legitimacy and sound logic?

Wed, 04/25/2012 - 07:16 | 2372752 q99x2
q99x2's picture

Since rating agencies aren't allowed to put out negative ratings maybe someone can announce that the US has re-entered recession. Seems to help the FTSE.

Wed, 04/25/2012 - 07:20 | 2372758 GeneMarchbanks
GeneMarchbanks's picture

Naturally that would be bullish since it would be an upgrade from the current depression.

Wed, 04/25/2012 - 08:52 | 2372913 He_Who Carried ...
He_Who Carried The Sun's picture

This auction was a FAILURE? Think again: If you were to take up some billions from your bank at that rate, I'd certainly call it a stunning success!

They tried to get 3bn instead of the usual 2bn for the 30yBund.

That was a bit much at that price. I mean THIRTY YEARS and all I'd get amounts to  2.41?

Geez, I am not THAT desperate after all.

If you were my bank manager trying to sell me that at that interest rate, I'd switch!

Wed, 04/25/2012 - 07:18 | 2372756 evolutionx
evolutionx's picture


Intersting rare  overview about Bank CDS


both european and US

CDS on Year to year basis up 100%

Wed, 04/25/2012 - 08:17 | 2372771 sockratte
sockratte's picture

some sovereign CDS would be nice, too.

something like this

Wed, 04/25/2012 - 07:23 | 2372763 youngman
youngman's picture

In the long run CDS will never pay out....the Bankers or governments will change the rules on that casino...and as for a 30 year bund..for I have left the world of the sane......or this is Saturday Night live stuff....look at Wild Bills Buffalo wing costs....up 91% year over year in chicken inflation there....

Wed, 04/25/2012 - 07:27 | 2372772 Dr. Engali
Dr. Engali's picture

CDS are good for a trade and nothing more. Anybody stupid enough to buy them thinking they are insured deserves what they get.

Wed, 04/25/2012 - 07:26 | 2372770 insanelysane
insanelysane's picture

Governments can't make money and there is only so much they can confiscate before they are voted out or overthrown.  Not a very good investment nor a very safe investment anymore.

Wed, 04/25/2012 - 07:29 | 2372777 Dr. Engali
Dr. Engali's picture

I vote for the latter

Wed, 04/25/2012 - 07:41 | 2372795 crawl
crawl's picture

Bad news is just a printing mistake. Put on the rosy glasses to read it the right way.

Wed, 04/25/2012 - 07:44 | 2372803 JohnKozac
JohnKozac's picture

i prefer the 3,000% yld on the 100 year greek gub'ment bonds.

Wed, 04/25/2012 - 08:14 | 2372839 OttoMBMP
OttoMBMP's picture

Bundesschuldenagentur is not BuBa. Never mind.

Wed, 04/25/2012 - 08:25 | 2372859 Sandmann
Sandmann's picture

Bundesrepublik Deutschland - Finanzagentur GmbH   I thought handled Debt Issuance

Wed, 04/25/2012 - 09:19 | 2373009 OttoMBMP
OttoMBMP's picture

However they call it, it is not the central bank aka Bundesbank or BuBa.

Wed, 04/25/2012 - 08:23 | 2372853 Sandmann
Sandmann's picture

A bit ambitious issuing 30-Year Paper in a Currency with a 12 Year history and then at 2.5%. Still someone has a sense of humour under current circumstances.

Wed, 04/25/2012 - 10:47 | 2373363 The Reich
The Reich's picture

Whoever bought it, thank you, for not let Germany default this time.

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