September 27, 2019 / 10:06 AM / 22 days ago

France to raise bond issuance in 2020 on higher redemptions

PARIS, Sept 27 (Reuters) - France will raise the amount of bonds it issues next year compared to this year as higher redemptions offset a smaller deficit, the public debt management agency said on Friday.

The Agence France Tresor said it planned to issue 205.0 billion euros ($224 billion) of medium and long-term bonds next year, net of buybacks, up from 200.0 billion this year.

France would benefit from a smaller state deficit next year, with the government expecting a budget shortfall of 93.1 billion euros after 96.3 billion euros this year.

But more debt would be issued because of a higher level of debt coming due that would need to be refinanced with redemptions, expected to reach 136.4 billion next year compared to 130.2 billion this year.

On top of that, there would also be 1.8 billion euros of debt from the state railway firm SNCF that would be redeemed, after the government agreed to carry its debt on its books.

The AFT said it aimed to increase the amount of Treasury bills outstanding by 10 billion euros to help absorb the higher funding requirement. A further 2 billion would come from funds earmarked for lowering debt as well as other resources.

France has been benefiting from record low borrowing costs in recent months as bond yields have dropped internationally in the face of deteriorating global growth prospects and expectations of more central bank monetary stimulus measures.

$1 = 0.9153 euros Reporting by Leigh Thomas; Editing by Sudip Kar-Gupta

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