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Best sovereign borrower

Agence France Trésor
The French borrowing team is widely praised for getting its innovations right

Coeuré: Has established a
unique relationship with
bond investors

Bankers pay France the ultimate compliment for a sovereign borrower. In its day-to-day financing and cash management, it is as boring as possible. Agence France Trésor (AFT), which manages France's central government debt, wins plaudits for the smooth running of its monthly long-dated and short-dated auctions. But this only serves to highlight its regular innovations as a borrower. Having helped create the markets for strip securities, constant maturity treasuries, and domestic and European inflation-linked bonds, AFT outdid itself in February when it launched the first euro-denominated 50-year bond. In doing so, it showed what a close relationship it has with its primary dealers and how keenly it judges what bond investors are thinking.

With interest in long-dated bonds rising, AFT had been looking at the possibility of a 50-year deal since 2002, and started talking to its banks about a deal early in 2004. "Ninety-five per cent of all our issuance is through auctions, but when we need deeper interaction with the market, and when pricing is a less straightforward process, we want to be able to use syndication," says Benoît Coeuré, deputy CEO of AFT.

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