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Agence France Trésor today announces the launch of the longest-maturity bond linked to the Eurozone harmonized index consumer prices (excluding tobacco): the OAT€I 1.80% 25 July 2040. The real yield as of the launch is 1.875%, 3 basis points under the previous 30-year indexed link benchmark, the OAT€i 2032. The price has been set at 98.148. The settlement date is March 14, 2007.
Lead managers for this operation were Barclays Capital, JP Morgan, Société Générale and UBS. Senior co-lead managers were ABN Amro, BNP Paribas and Natixis. The 20 primary dealers were part of the syndicate.
After the completion of the order book on Monday 5 and Tuesday 6 March, demand reached €6.4bn, of which €4bn was allocated.
A large proportion of the order book (25%) is allocated to asset managers, pension funds and insurance companies. The presence of central banks (3%) is also noticeable. The large proportion of banks (55%) reflects the development of inflation-related structured products and inflation hedging strategies of end-investors.
The geographical distribution reflects the diversity of interest for the transaction. One half of orders were subscribed in the euro zone and one third in the United Kingdom. The significant participation of North America (10%) confirms the interest of American investors for long-dated, euro denominated bonds.
This new index linked bond will be regularly auctioned, according to investors demand and in order to guarantee its liquidity.
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