France financed itself at a negative rate in 2020

Posted on Dec. 2020 at 17:39Updated Dec 9, 2019 2020 at 19:15

Agence France Trésor (AFT) ended last Thursday for an extraordinary 2020 fiscal year. In charge of placing France’s debt on the markets, she had to face the consequences of the Covid, in a year of all records. In terms of amount first of all. At the end of four amending finance laws, as the effects of the pandemic were felt, the initial program of 205 billion euros – already the highest in history – jumped. AFT raised 260 billion euros in OATs (medium and long term bonds). An amount that is around 290 billion if we add the early buybacks of bonds maturing in 2021 and 2022.

In terms of rates, the results are just as dizzying: France has financed itself overall – for its medium and long-term obligations – at a negative rate this year: -0.14%. Never seen ! The previous record, 0.11%, dated from 2019. This is of course an average yield, which is explained in particular by the weight of bond issues with a maturity of between 5 and 10 years, which represent 63% of operations this year. But, up to 20 years, French rates move into negative territory. Which amounts to saying that Bercy made money by borrowing. And this despite a colossal amount to borrow, which pushed AFT to increase the average size of its auctions to more than 10.5 billion euros for long-term bonds.

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