Bonds News

Euroclear says likely cause of Belgium's big rise in Treasuries

(Adds Treasury holding details, background on Euroclear)

May 16 (Reuters) - Belgium-based clearinghouse Euroclear said it is likely responsible for that country’s large holdings of U.S. Treasuries, which have increased substantially in the last several months, a spokesman told Reuters on Friday.

Euroclear’s admission solves a mystery that had captured the interest of the bond market in recent months as Belgium’s holdings more than doubled between August and March. The country is now the third-largest foreign holder of U.S. Treasuries.

According to U.S. Treasury data released Thursday, Belgium’s holdings of U.S. Treasury debt were $381.4 billion in March, compared with $166.8 billion as of August 2013.

Belgium-based Euroclear holds assets on behalf of more than 2,000 financial institutions in more than 90 countries, as well as for millions of retail investors.

The spokesman would not comment as to whether there’s been a sudden surge of business from customers holding Treasuries. The company has about 24.2 trillion euros ($33 trillion) of all assets in custody.

The purchases from Belgium were mainly in short-term bills from November to March. Over that period, Belgian institutions sold $6.82 billion in long-term U.S. Treasury notes and bonds, the Treasury data shows.

The country’s holdings are still easily dwarfed by the top two holders of U.S. debt, China and Japan, which hold $1.272 trillion and $1.2 trillion, respectively. (Reporting by Phil Blenkinsop; Editing by James Dalgleish)