An FMRS Case Presentation
Bond Market in Belgium
The Belgian Bond Market- An
Belgian debt market is a small market, mainly
Belgium issues each year just under 40 billion
Euros in bonds.
Belgium, like other European countries has its
domestic bond markets in which the government,
sub-sovereign entities and companies issue
bonds and individual investors participate.
However, bond markets in European countries
are increasingly behaving like a single market.
Types of Bonds- Bond market
Government bonds 
Sub-sovereign bonds 
Corporate bonds 
Asset-backed- collateralized bonds 
(Each with different characteristics, risk, reward)
 Government bonds/sovereign
Issued by the central government of Belgium;
Purpose: To cover the deficit, to refund existing
debt, to raise capital;
Highest quality, minimal risk bonds;
In Belgium, individual investors prefer to invest in
bonds directly while in other European countries
such investments take place primarily through
Issued by: regions, provinces, states,
municipalities or supranational institutions
(supranational entity is formed by two or more
central governments to promote economic
development for the member countries)such as
the World Bank and the European Investment
The market for sub-sovereign bonds in Belgium
has less individual participation than in the US.
 Corporate Bonds
2 Categories: investment-grade corporate bonds
(high credit quality) and speculative-grade (lower
Individual investors are less involved directly in
the corporate bond market in Belgium than in the
In order to promote the listing of corporate bonds
on the Brussels market, NYSE Euronext set up a
‘bond taskforce’ in 2009. This taskforce was
composed of representatives of the major
banks, brokers, and law firms, and was strongly
supported the FSMA by the Belgian regulator.
 collateralized bonds
collateralised debt instrument is a kind of
promissory note backed by collateral;
Securitisation, Structured Products and Covered
one of the fastest developing investment vehicles
in the last decade.
The collateralised debt market has been the one
most severely hit by turbulence since the summer
of 2007, and so is undergoing changes.
Types of procedures used to place
bonds on the market
Bank syndicates 
Bonds issued to individuals 
A tender is a kind of bond sale auction offered by
the State. During these operations, the debt
agency announces the amount it wishes to raise
and the characteristics of the bonds (coupon,
The goal for the debt agency is to obtain the best
possible price. The primary dealers and the
recognized dealers then offer the bonds to their
A number of carefully selected banks, primary
dealers and recognized dealers then participate
in the tender and offer their price. The tender is
based on these offers.
 Syndicate Loan
The syndicate loan is a procedure by which the
State issues new bonds through a pool of banks.
The latter are then responsible for offering these
bonds to investors on the bond market.
Belgian medium and long term debt bonds are
called "OLO" ("Obligations Linéaires"). They are
denominated in Euros and are issued by auction
or through a bank syndicate, during the first
phase of the bond issue. These bonds are
generally set at fixed rates and their duration
ranges from 2 to 30 years.
 Bonds to individuals
The Debt Agency of the Kingdom of Belgium
(l’Agence de la Dette du Royaume de Belgique)
is responsible for managing the country's public
the debt agency issues debt securities directly to
individuals, 4 times per year.
The bonds available to private individuals are
government bonds. They are issued for periods of
3, 5 and 8 years, with a nominal value of 200
Euros. Their coupon is fixed. They are issued four
times a year in March, June, September and
December by institutions approved by the Ministry