French Government Auction Draws €115 Billion in Bids Amid Rising Fiscal and Geopolitical Risks

France successfully completed a new sovereign bond issuance with total bids reaching €115 billion, significantly exceeding the €30 billion in securities offered. This level of demand highlights continued appetite among institutional investors for French government debt, even as macroeconomic headwinds intensify. The auction, which targeted a three-year benchmark note, saw an order book ratio of nearly 3.8:1, indicating strong investor interest relative to supply. Despite rising concerns over public debt sustainability, inflation trends, and regional instability affecting Europe, the robust bidding suggests that French bonds remain perceived as relatively safe assets within the eurozone. Key figures from the auction show that the final yield settled at 2.78%, a modest rise from previous auctions but still below market expectations. The distribution revealed that over 60% of the bids came from foreign investors, including central banks and asset managers based in Asia and the Middle East, reinforcing international reliance on French debt. Market participants noted that while risk factors such as elevated government borrowing costs and potential fiscal tightening loom, the resilience in demand helps maintain France’s access to capital at manageable spreads. Credit rating agencies have recently reaffirmed France’s BBB+ long-term rating, citing structural reforms and fiscal discipline, though some caution about growth momentum remains. The strong performance may ease near-term refinancing pressures for Paris, but sustained high demand will be critical as France faces increasing debt service obligations through 2027.