Debt issuance low in third quarter

Statistical News Release
Date 18 November 2014

In the third quarter of 2014, total issues of short-term money market paper and and long-term bonds by Dutch residents ran to EUR 122 billion, against EUR 167 billion in the previous quarter (down 27% q-on-q). The outstanding amount of short-term and long-term paper remained virtually flat at EUR 1,804 billion as redemptions were limited.

Debt issuance low in capital market

Dutch institutions issued fewer bonds in the third quarter of 2014 as they had relatively little need to refinance scheduled redemptions (Figure 1). In terms of volume, they issued EUR 46 billion worth of bonds, relative to EUR 92 billion in the previous quarter. Redemptions landed at EUR 42 billion, compared with EUR 69 billion in the second quarter. The total volume of outstanding bonds grew by 1.6% q-o-q to reach an all-time high of EUR 1,667 billion.

Figure 1: Issuance of Dutch bonds
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Issuance of Dutch bonds

The State of the Netherlands issued EUR 34 billion's worth in money market paper (up 39% q-o-q) and redeemed EUR 32 billion. Banks raised EUR 19 billion, as against EUR 26 billion in the previous quarter, while redemptions ran to EUR 28 billion (EUR 27 billion in the second quarter). At EUR 75 billion, total outstanding money market paper issued by banks stood at the lowest level recorded in four years.  

Newly issued money market paper in the euro area, at EUR 1,060 billion, was down by 19% on the previous quarter, while total outstanding money market paper inched up by 0.7% to EUR 1,341 billion. 

Trend-based increase in foreign currency issuance

Dutch residents have gradually raised the share of their outstanding foreign currency debt securities over the past couple of years (Figure 3). From 20% in 2010, it climbed to 26% in the third quarter of 2014, while the total volume of outstanding debt securities grew. Accordingly, euro-denominated debt issuance shows a trend-based decline.

Figure 2: Issuance of Dutch money market paper
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Issuance of Dutch money market paper

The State of the Netherlands issued EUR 34 billion's worth in money market paper (up 39% q-o-q) and redeemed EUR 32 billion. Banks raised EUR 19 billion, as against EUR 26 billion in the previous quarter, while redemptions ran to EUR 28 billion (EUR 27 billion in the second quarter). At EUR 75 billion, total outstanding money market paper issued by banks stood at the lowest level recorded in four years.  

Newly issued money market paper in the euro area, at EUR 1,060 billion, was down by 19% on the previous quarter, while total outstanding money market paper inched up by 0.7% to EUR 1,341 billion. 

Trend-based increase in foreign currency issuance

Dutch residents have gradually raised the share of their outstanding foreign currency debt securities over the past couple of years (Figure 3). From 20% in 2010, it climbed to 26% in the third quarter of 2014, while the total volume of outstanding debt securities grew. Accordingly, euro-denominated debt issuance shows a trend-based decline.

Figure 3: Development in euro and foreign currency debt securities
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Development in euro and foreign currency debt securities

Growth in foreign currency debt issuance was most prominent for money market paper, rising from 24% to 44%. This development is fuelled by increasing foreign currency issuance by banks, whose outstanding money market paper is two-thirds foreign currency denominated. The banks' outstanding long-term debt securities likewise comprise a significant non-euro component, at 43%.  

For the euro area as a whole, the share of foreign currency denominations in the value of total outstanding debt securities stood at 13% in the third quarter of 2014, relative to 11% in 2010 .