Bank treasuries biggest buyer of many 2023 EZ bond sales
Govt debt attractive as yields jump
Asset manager buying down 7 ppt this year Deutsche Bank

Feb 28 Reuters Banks are becoming the leading buyers of some euro zone governments39; bond sales, taking advantage of surging interest rates as the European Central Bank looks to reduce its presence in the market.

Euro zone governments need private buyers to pick up some 400 billion euros 422 billion of additional debt this year.

Funding needs remain high due to the energy shock that followed Russia39;s invasion of Ukraine, while the ECB, a huge buyer in recent years, will soon start reducing the bonds it holds on its 8 trillion euro balance sheet as it tightens monetary policy to contain inflation.

Heavy central bank buying had kept borrowing costs and volatility low for years, so the key question now is who steps in as the ECB steps out.

Sales of bonds directly to end investors by bank syndicates so far this year show bank treasuries buying a much larger share of some countries39; debt, according to data from debt agencies and Refinitiv39;s IFR, as surging interest rates boost the appeal of government bonds.

In many transactions, they are the largest buyers, said Pierre Blandin, global head of sovereign, supranational and agency debt capital markets at Credit Agricole CIB, which has arranged many of this year39;s deals.

Funding officials said bank treasuries usually buy bonds that mature in up to 10 years, but…