Debt issuance declines

Statistical News Release
Date 19 February 2014
Dutch residents' issues of both short-term money market paper and long-term bonds declined in the fourth quarter of 2013 (by EUR 47 billion or 26% overall, Q-o-Q) and were EUR 127 billion. Outstanding short-term and long-term paper declined by 1.3% Q-o-Q, to EUR 1,723 billion (almost triple the Dutch GDP).
 

Money market paper issuance declines

During the fourth quarter of 2013, gross issuance of money market paper amounted to EUR 70 billion(37% less than in the preceding quarter). The drop in issues was caused in part by lower refinancing needs, as evidenced by EUR 98 billion in redemptions of money market paper. Also, the banking industry continued to reduce the amount of outstanding of short-term debt securities so as to further reduce its balance sheet. Given new legislation, banks extended the average duration of their outstanding debt, in line with moves to reduce their balance sheets. Owing to moderate money market paper issuance by banks (EUR 22 billion, see figure 1), outstanding issues of such paper declined by EUR 12 billion to EUR 76 billion, the lowest level since mid-2010.
 
The Dutch central government also issued less money market paper (EUR 28 billion, or 46% less than in the previous quarter). The outstanding amount of money market paper issued by the Dutch Treasury thus declined by EUR 13 billion to EUR 26 billion, the lowest level since the beginning of 2008 (and in line with the Dutch State Treasury Agency's target level of circa EUR 30 billion). With the decline of issues by banks and general government, the outstanding amount of Dutch short-term debt securities fell to EUR 122 billion (-19% Q-o-Q), the lowest level since mid-2008.
 
In the euro area, the outstanding level of money market paper also declined, by EUR 123 billion (-9% Q-o-Q) to EUR 1,310 billion, the lowest level since the third quarter of 2007.


Money market paper issuance by Dutch banks
Money market paper issuance by Dutch banks

Slight decline in bond issues

The fourth quarter of 2013 saw EUR 57 billion worth of bond issues (-9% Q-o-Q). Mirroring the lower issues were 34% lower redemptions (EUR 54 billion). As a result, the outstanding amount of bonds remained nearly unchanged in the fourth quarter of 2013 (at EUR 1,602 billion).
 
While banks issued 31% more bonds in the fourth quarter of 2013 (EUR 20 billion) compared to the preceding quarter, gross issuance still remained below the EUR 22 billion three-year average, see Figure 2. The outstanding amount of bank bonds declined by EUR 1 billion to EUR 413 billion, continuing the sustained net redemption of long-term debt paper since mid-2011 (outstanding amount was EUR 454 billion). New securitisation issues by Special Purpose Vehicles (SPVs) were moderate, at EUR 4 billion. So were new bond issues by the Dutch central government (EUR 7 billion). Meanwhile, large corporate bond issues were once more performed by Dutch non-financial corporations and Special Financial Institutions.
 
In line with developments in the Netherlands, euro area issues and redemptions of bonds declined, while the outstanding volume of bonds remained broadly unchanged (at EUR 15,147 billion).   

Long-term bond issuance

Long-term bond issuance