Germany's federal government will aim to raise around 225 billion euros ($358 billion) on capital markets next year, a deputy finance minister said. Germany's 2009 total borrowing need - roughly equating to annual bond issuance - would be "in the region of 225 billion euros" Deputy Finance Minister Werner Gatzer told Reuters.
This would be slightly lower than in 2008, according to ministry documents. Net new borrowing is due to drop by nearly 1.5 billion euros in 2009 to 10.5 billion euros. Excluding inflation-indexed bonds - known as linkers - Germany's bond issuance in 2008 was set last December at 213 billion euros. The federal government has also issued some 7 billion euros worth of linkers so far this year.
The German linkers are indexed to euro zone inflation (excluding tobacco), which has reached levels few had anticipated when Germany began issuing the bonds early in 2006. Last month euro zone inflation hit a record 4 percent.
Gatzer said the government was "satisfied" with the performance of the bonds and remained committed to covering the full range of maturities with linkers in future.
"The mere existence of a product like this raises our attractiveness, and the market is reflecting that," he said. Germany aimed to cover up to 5 percent of its gross borrowing need with inflation-indexed bonds, he said. However, Gatzer said Germany would not have a clear picture of how valuable the linkers had been until the bonds reached maturity - the earliest of which should be in 2013.
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