Belgian State Bonds Draw 193 Million Euros on First Day of Subscription
Belgian state bonds have made a strong start, with 193 million euros subscribed on the first day of the issuance campaign, according to VRT NWS. The figure, reported by the Federal Debt Agency, marks a significant improvement over recent issuances, though it remains far below the extraordinary levels seen during the record-breaking 2023 campaign.
A Strong Start Compared to Recent Issuances
The amount raised on the first day is more than four times higher than the opening day of the previous issuance in June 2026, when 44.4 million euros was subscribed. That June issuance ultimately raised nearly 273 million euros in total, according to HLN.
The Federal Debt Agency is issuing state bonds on 4 September with maturities of one year and ten years, offering net yields of 1.925 percent and 2.59 percent respectively. The one-year bond has proven by far the most popular, attracting more than 170 million euros of the total first-day subscriptions.
The 2023 Comparison
While the current figures are encouraging, they remain well below the extraordinary demand seen in 2023, when the state bond became a national phenomenon. The 2023 one-year bond, which offered a net yield of 2.81 percent, attracted approximately 2 billion euros on its first day alone and ultimately raised over 22.3 billion euros by the time subscriptions closed, as VRT NWS reported at the time.
The 2023 bond benefited from exceptional circumstances, including a one-time reduction in withholding tax from 30 percent to 15 percent implemented by then-Finance Minister Vincent Van Peteghem. That special tax treatment, combined with a higher net yield and widespread frustration with low bank savings rates, fueled unprecedented demand from small savers.
Competitive Yields in a Rising Rate Environment
The current issuance offers the highest yields in years, particularly for the ten-year bond. The ten-year state bond provides a gross yield of 3.70 percent (2.59 percent net), the highest level in years, driven by rising OLO rates—Belgian government bond yields that have reached 3.81 percent, a level not seen since February 2012, according to HLN.
Jean Deboutte, Director of the Federal Debt Agency, explained the surge in long-term yields: “The ten-year rate on OLOs is now 3.81 percent and we have to go back to February 2012 to find such a high level.”
Banks Respond to Competition
The state bond’s competitive positioning has prompted banks to adjust their offerings. Beobank announced it is raising rates on its term accounts to compete with the state bond, offering a 3 percent gross rate (2.10 percent net) on its one-year term account, as HLN reported. Internet bank MeDirect offers 3.20 percent gross (2.24 percent net) on its one-year term account, slightly higher than the state bond.
Most other banks’ term accounts offer lower returns than the state bond, and traditional savings accounts at major banks such as Belfius and KBC offer only 0.6 percent interest—making the state bond an attractive alternative for retail savers.
Subscription Details and Outlook
Subscriptions for the new state bonds remain open until 3 September. The bonds target private individuals and are typically issued four times per year, according to Business AM.
The strong first-day performance suggests renewed interest in state bonds as a savings vehicle, driven by higher yields and a competitive rate environment. However, whether total subscriptions will approach or exceed the June 2026 total of 273 million euros remains to be seen as the subscription window continues.
With the ten-year bond offering its highest yield in years and banks responding to competitive pressure, the current issuance highlights the ongoing evolution of Belgium’s retail savings market. The final subscription total, expected after the 3 September deadline, will provide a clearer picture of whether this issuance can build on its promising start.