Key Takeaways
- France successfully auctioned €1.495 billion in inflation-linked bonds, with demand for long-dated 2040 maturities reaching a bid-to-cover ratio of 3.22x.
- Blue Owl Capital (OWL) offloaded $1.4 billion in direct lending assets to institutional investors at 99.7% of par value, aimed at returning capital to shareholders.
- UK manufacturing orders improved slightly to -28 in February, matching estimates, but selling price expectations of 26 came in higher than the forecasted 23.
- The German government clarified that there are no current plans or decisions to purchase additional F-35 fighter jets from Lockheed Martin (LMT) beyond existing orders.
Strong Demand for French Inflation-Linked Debt
The Agence France Trésor (AFT) reported robust investor appetite during its latest auction of inflation-indexed government bonds (OATi/OAT€i) on Thursday. The treasury sold €300 million of its 1.8% 2040 bonds at an average yield of 1.64%, supported by a high bid-to-cover ratio of 3.22x, signaling strong institutional interest in long-term inflation protection.
Further tranches included €525 million of 0.6% 2034 bonds at a 1.18% yield and €670 million of 3.15% 2032 bonds at 0.86%. The consistently high bid-to-cover ratios across all maturities suggest that investors remain confident in French sovereign credit despite broader European economic uncertainties.
Blue Owl Capital Liquidity Move
Blue Owl Capital (OWL) has entered into agreements to sell $1.4 billion in direct lending investments from three of its credit funds to North American pension and insurance investors. The sale includes assets from Blue Owl Capital Corporation (OBDC), Blue Owl Capital Corporation II, and Blue Owl Technology Income Corp.
The transaction was executed at 99.7% of face value, a move intended to provide a market-based validation of the firm's internal valuations. By offloading these senior secured debt investments, Blue Owl aims to pay down debt and facilitate a significant return of capital to its investors by the end of the first quarter of 2026.
UK Manufacturing and Persistent Price Pressures
The Confederation of British Industry (CBI) Industrial Trends Survey for February showed a marginal improvement in the UK manufacturing sector. The Total Orders balance rose to -28, up from -30 in the previous month, aligning with analyst expectations.
However, the survey highlighted ongoing inflationary concerns as the Selling Prices index hit 26, exceeding the estimated 23. While the pace of order declines is slowing, the higher-than-expected price expectations suggest that manufacturers are still struggling with elevated input costs and may pass these through to consumers.
Germany Clarifies F-35 Procurement Status
A spokesperson for the German Government stated on Thursday that there are currently no plans or decisions regarding the purchase of additional F-35 fighter jets. This announcement follows recent market speculation that Berlin was considering expanding its fleet beyond the 35 jets originally ordered from Lockheed Martin (LMT) in 2022.
The clarification comes as Germany continues to modernize its air force to meet NATO commitments. While the existing order for 35 F-35A aircraft remains on track for delivery starting later this year, the government appears to be pausing on further commitments amid budget scrutiny and defense policy evaluations.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.