15 January 2004: France creates the first euro-dominated index-linked bond with a maturity of 15 years

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Agence France Trésor announces the issue of the 15-year OAT€i, linked to the euro zone HICP consumer price index (excluding tobacco). It bears a coupon of 2.25 per cent. The real rate of interest at launch is 2.37 per cent, implying a break even inflation of 2.26 per cent. The price was 98.37.

The book building has resulted in bids representing EUR 5.5 billion, of which EUR 4bn were served. The book building demonstrates the diversity of investors interested in index-linked bonds: asset managers, pension funds, insurance companies, public financial institutions, hedge funds and investment banks. The wide geographic distribution demonstrates the broad interest for the product: around 60% of the orders were subscribed in the euro zone, of which two thirds were in France and 40% outside the euro zone, in particular the United Kingdom, the United States and Asia.

The success of this new issue confirms the maturity acquired by the euro zone index-linked bond market initiated in 1998 by France, as well investors' interest for French Treasury products. This new index-linked OAT brings the number of such bonds in the portfolio of French government securities to six, with maturities ranging from 2009 to 2032, for an outstanding total of EUR 48.4 billion in nominal value.