French Finance Ministry Says No Change in Bond Issuance Strategy

France’s finance ministry said it is not changing its strategy for bond issuance and will continue to use the flexibility it has at auctions.

The comments came after the Wall Street Journal reported the country is considering issuing more shorter-term debt after recent selloffs of long-dated bonds. The article cited an interview with Finance Minister Roland Lescure.

“France’s debt issuance strategy follows investors’ demand,” the finance ministry said in comments sent to Bloomberg. “It allows us to have flexibility when deciding which specific bonds we intend to issue for the auctions, so as to be as close possible to demand.”

“The fact that we have issued less on longer dated securities (30+ years) reflects that strategy,” the ministry added. “In a context of higher yields, primary dealers have relayed lower demand for those bonds over the past few months.”

The premium on French 10-year debt over safer German peers dipped following Lescure’s reported remarks, but quickly recovered to close 12 basis points higher at 140 basis points. French bond futures held their declines after Bloomberg reported the ministry saying there was no change in the bond issuance strategy.