France’s first syndicated bond sale in eight months, amid political challenges, received overwhelming investor interest. The bond maturing in 2042 saw orders surpass €100 billion ($104 billion), indicating strong demand despite the country’s political instability.
France’s first syndicated bond sale in nearly eight months was met with overwhelming investor interest, signaling confidence despite ongoing political challenges. The new government, led by President Emmanuel Macron, is facing difficulties in securing enough support for the country’s budget.
The bond sale, which saw orders surge past €100 billion ($104 billion), will issue a note maturing in 2042, with pricing set at eight basis points above comparable bonds. This could be a record-setting amount, showcasing strong market confidence in France’s financial stability despite its political uncertainty.
Syndicated debt offerings, such as this one, are typically more expensive than traditional auctions. However, they enable governments to raise large sums quickly while also broadening their investor base. The last syndicated offering by France was an inflation-linked bond issued in May 2024, just before the country entered a period of political turbulence following early legislative elections.
France’s political situation remains tense. The previous government, led by Michel Barnier, collapsed after failing to garner enough support for a budget that included major spending cuts to address the country’s large deficit. Prime Minister François Bayrou, who recently survived a no-confidence vote, is now facing similar challenges. The political outlook remains uncertain, with far-right and Socialist parties abstaining from the vote against Bayrou’s administration.
The spread between French and German 10-year yields—a key risk gauge—narrowed sharply in recent weeks, falling the most since October. As of Tuesday, the gap remained steady at around 78 basis points.
Despite the political turbulence, the French government’s bond sale demonstrates strong investor demand and resilience, positioning the country to navigate its budgetary and financial challenges.
