Ir bonds crash october

Bonds Crash : Myth or Reality ?

Nicolas Forest, Head of Interest Rate StrategyKoen Van de Maele, CFA, Global Head of Fixed Income

October 2009 - Brussels

Bonds Crash : Myth or Reality ?

Nicolas Forest, Head of Interest Rate StrategyKoen Van de Maele, CFA, Global Head of Fixed Income

October 2009 - Brussels

3Source : Bloomberg & Dexia Asset Management Interest Rate Research

Agenda

I. The Usual Suspects

II. Can we really trust Central Banks ?

III. Can we really trust Governments ?

IV. Can we really trust Bonds Market ?Government bond marketCorporate bond market


Bonds Crash

The Usual SuspectsThe “Money Printers” and “Inglorious Spenders”…


The Usual Suspects

“Central banks around the globe are printing money, lowering interest rates, and altogether loosening up monetary policy—all of which will lead to inflation and high commodity (i.e., gold) costs.”Epoch Times, 15 September 2009

“At some point, the Fed will need to drain this cash out of the financial system as it raises interest rates. If it doesn't act soon enough, it could risk letting inflation rise above desired levels.” The Wall Street Journal, 17 September 2009

“The U.S. Congressional Budget Office is pegging the federal budget deficit for 2009 at US$1.6-trillion "I would not be surprised that at some point after 2011 that yields rise as high as 6% to 7%." says Mr. Zandi chief economist of Moody's. This rise in yields would equate to significant capital losses for bondholders.” Financial Post, 22 September 2009

« L'ensemble de la dette américaine (État, entreprises, ménages) est de 400 % du PIB, proche des niveaux de 1929», prévient Michaël Benhaïm, responsable de la gestion obligataire chez Pictet. Faut-il craindre un krach obligataire ? « On ne peut pas écarter ce scénario lors de la sortie de crise»Moneyweek, 25 June 2009

“Ben Bernanke said this week that the recession is "very likely over." Yes, the recession may be over in nominal terms, but massive inflation has just begun and prices of stocks and real estate will continue to plummet when valued in real money, gold and silver. And it may still be too late to prevent hyperinflation”National Inflation Association, September 2009

“L'ombre du krach obligataire de 1994 plane ànouveau sur les marchés” La Tribune, 15 September 2009

…could cause a Bond Crash ?


Can we really trust Central Banks ?

Evolution of Central Bank Supply

-

500 000

1 000 000

1 500 000

2 000 000

2 500 000

2002 2003 2004 2005 2006 2007 2008

The quantity of reserves in the banking system has risen dramatically…

+ 1 162 billions of us dollars in 1 year

i.e. 9% of the GDP

* The Fed has the ability to purchase assets or offer loans withmoney created by itself : it prints money

* Composition of the Supply(millions of us dollars)

-

500 000

1 000 000

1 500 000

2 000 000

2 500 000

2002 2003 2004 2005 2006 2007 2008

Central Bank Liquidity Sw apsPortfolio Holding of Commercial Paper Funding FacilityOther loans Term auction creditSecurities Held Outright

The massive asset purchases & the liquidity facilities explain the increase of the supply offered by the Federal Reserve


These facilities have unfreezed the credit markets…Can we really trust Central Banks ?

Ted Spread & CP Fund Facility

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2002 2003 2004 2005 2006 2007 20080

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

Ted SpreadPortfolio Holding of Commercial Paper Funding Facility

Credit Spread & Term Auction Credit

-

50

100

150

200

250

300

2003 2004 2005 2006 2007 20080

100 000

200 000

300 000

400 000

500 000

600 000

Credit Spread Term auction credit

The commercial paper facilities aim to unfreeze the money markets and

reduce the Ted Spread…

The Federal reserve wanted to decrease the

risk premium & normalize the credit spreads…


Supply absorbed by depository institutions

-

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

1 600 000

1 800 000

2002 2003 2004 2005 2006 2007 2008

Currency in circulation Deposits w ith Banks Other

… and have created a large quantity of excess reserves…

Supply non absorbed by depository institutions

-

100 000

200 000

300 000

400 000

500 000

600 000

700 000

800 000

900 000

1 000 000

2002 2003 2004 2005 2006 2007 2008

The supply non absorbed by depository institutions are excess

reserves



Components of the Monetary Base

-

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

1 600 000

1 800 000

2 000 000

2002 2003 2004 2005 2006 2007 2008

Currency in circulation Reserve balances w ith Federal Reserve Banks

… which banks don’t transmit into the economy

The Money Multipliers

0.5

0.7

0.9

1.1

1.3

1.5

1.7

1.9

2.1

2002 2003 2004 2005 2006 2007 20083

4

5

6

7

8

9

10

Money Multiplier M1 Money Multiplier M2

The excess reserves are not transmitted to the monetary mass : money multipliers have collapsed !There is no inflationary risk in the short term

The increase of monetary base is explained by the excess reserves



13%8%Annual M2 Growth

9.004.75Money Multiplier

15 6888 283M2 (billion of $)

1 7431 743Monetary Base (billion of $)

833833Excess Reserves (billion of $)

SimulationCurrent

Should the excess reserves be converted into new loans, money would grow faster…

Annual Growth of M2

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

60 63 66 69 72 75 78 81 84 87 90 93 96 99 02 05 08 11 14

The amount of excess reserves doesn’t change…

… but the multiplier normalizes…M2 increases to 7 405 billions of dollarsThe excess reserves are used in the real economy

… and annual M2 growth increase significantlyWe assume a shift on 5 yearsThe average is close to 13%


Simulation


US Money Growth & Inflation

2000

1990

1980

1970

19601950

1940

1930

1920

1910

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

0% 2% 4% 6% 8% 10% 12% 14% 16%

Annual Growth of M2

Infla

tion

… and cause severe inflation

US M oney Growth & Inflation

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 01 06

M2 CPI

In the long term, money growth and inflation are correlated…



The German example in the 1920sCan we really trust Central Banks ?

Annual Growth of Monetary Mass in Germany(in percentage)

0%

200%

400%

600%

800%

1000%

1200%

1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922

Currency in circulation

Monetary Base

The currency in circulation has been

multiplied by 215between 1910 & 1922

Wholesale Price Index

-

100 000 000 000

200 000 000 000

300 000 000 000

400 000 000 000

500 000 000 000

600 000 000 000

700 000 000 000

800 000 000 000

1914 1919 1921 1922 1923 1923

Wholesale Price Index


But the Federal Reserve could reduce the excess reserves…

The Fed can reduce the size of excess reserves…By selling securities

Bill, Notes and BondsFederal agency debt securities & mortgage-backed securities

By reducing the credit facilitiesTerm auction creditOther Programs (ABCP Liquidity Facility, Term Asset-Backed Securities Loan Facility…)

… but that could impact market stabilitySelling Securities

risk on interest ratesrisk on credit spreads

Reducing the credit facilityRisk on inter banking market



…or raise its interest rate to discourage the lending opportunities

Since October 2008, the Fed remunerates the excess reserves

An increase of interest rates will reduce the transmission from excess reserves to the real economy

The Fed can keep its securities and support the bond market

The Fed will reduce the inflation expectations

The beginning of the tightening cycle can favor the flattening of the curve


Evolution Central Bank Rate

0.00

1.00

2.00

3.00

4.00

5.00

6.00

Sep-08 Dec-08 Mar-09 Jun-09FF LIBOR 3M OIS 3M

Why does the Federal Reserve want to pay interest on excess balances?“Paying interest on excess balances should help to establish a lower bound on the federal funds rate by lessening the incentive for institutions to trade balances in the market at rates much below the rate paid on excess balances. Paying interest on excess balances will permit the Federal Reserve to provide sufficient liquidity to support financial stability while implementing the monetary policy that is appropriate in light of the System's macroeconomic objectives of maximum employment and price stability”Board of Governors of the Federal Reserve System.


New-Zealand - Components of Monetary Base

-

5 000

10 000

15 000

20 000

25 000

30 000

35 000

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007

Currency in Circulation Excess Reserves

Excess reserves are not always inflationary

New-Zealand - Inflation & Monetary Mass

-1%

0%

1%

2%

3%

4%

5%

6%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Annual Grow th of M2 [R.H.S] CPI

The Reserve bank of New Zeeland has used the same framework since

2006…and the excess reserves have been

multiplied X 2

Despite the increase of excess reserves,

inflation has decreased since 2006


Sweden’s Riksbank pays banks a negative interest rate of minus 25 basis points for dumping excess reserves in its deposit facility. The idea is to give them an incentive to lend excess reserves to the real economy.


Yes, we can

The massive excess reserves have saved the banking system…Normalization of money marketsReduction of risk premiums

…and can be controlled by a specific frameworkIncrease of interest ratesWithout removing the excess reserves from the banking system

The quantitative easing permits to regulate the economy…Stabilization of mortgage ratesStabilization of bonds market

…if central banks keep their credibilityPerfect economic consensus to avoid the deflation riskUnusual coordination of monetary policy



Fed Fund Target & Logit Model

-2

0

2

4

6

8

10

87 90 93 96 99 02 05 08ACT FIT +3

We expect the end of the Zero Interest Policy in 2010

ECB Target Rate & Logit Model

0

1

2

3

4

5

6

96 99 02 05 08ACT FIT T+3


The Taylor rules suggest possibility

of hikes…if the employment market

improves

Central Bank can raise interest rate without removing liquidity…a useful tool in the case of

rebound of the economy


The global public debt increases…Can we really trust Governments ?

1999

Source : The economist


…more and moreCan we really trust Governments ?

2011



…more and moreCan we really trust Governments ?

European Budget Deficit

-10%

-8%

-6%

-4%

-2%

0%

2%1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Belgium France Germany


Government Debt (as a percentage of the global public debt)

0%

5%

10%

15%

20%

25%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Belgium France Germany US


But the relation between public debt and government yield is not very stable...Can we really trust Governments ?

The impact of rising government debt on bond yields is unclearThe sign of the relation between debt and yield can be negative

The Fed estimates the possible impact of government debtFor 1% of Debt / Gdp, interest rates can increase between 3 and 4 basis pointsFor a change of 35% of the Debt / Gdp, the bonds yield could increase to 1.25%

1950-1970

y = -0.7643x + 0.1162R2 = 0.7586

0%

1%

2%

3%

4%

5%

6%

7%

8%

6% 8% 10% 12% 14%Debt/Gdp

Yiel

d Le

vel

1970-1985

y = 0.4552x + 0.0293R2 = 0.6817

0%

2%

4%

6%

8%

10%

12%

14%

16%

6% 11% 16% 21% 26% 31%Debt/Gdp

Yiel

d Le

vel

1985-2009

y = -0.1105x + 0.1226R2 = 0.7521

0%

2%

4%

6%

8%

10%

12%

14%

0% 20% 40% 60% 80% 100%Debt/Gdp

Yiel

d Le

vel


The demand for government debt changes… (Central Banks Demand)Can we really trust Governments ?

Initial Situation

If a central bank buys treasury bondsIt increases the bank reservesAnd impacts the government bond prices

The Fed held 740 billions of treasuries7% of the total public debt

The announcement of purchases has significant impact on government yield

US Treasuries Held by the FED(milions of USD)

400 000

450 000

500 000

550 000

600 000

650 000

700 000

750 000

800 000

850 000

2002 2003 2004 2005 2006 2007 2008

Final Situation

Source Gongdon

(2003)


Can we really trust Governments ?The demand for government debt changes… (Central Banks Demand)

BOE announces to buy £75 billion

FED announces to buy $300 billion


Can we really trust Governments ?

Foreign Holders Treasuries(billion of US dollars)

-

500

1 000

1 500

2 000

2 500

3 000

3 500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Asia Emu Europe ex EMU America Other

Foreign Holders Treasuries(as a percentage of the total public debt)

0%

5%

10%

15%

20%

25%

30%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Asia Emu Europe ex EMU America Other

In 1 year, US public debt has increased

with 22%...

… of which 38% has been bought by

foreign holders

The demand for government debt changes… (Foreign Holders Demand)

Debt Held by Foreign Holders

(on total public debt)

12%

14%

16%

18%

20%

22%

24%

26%

28%

30%

32%

20012002 200320042005 20062007 20082009

Foreign Holders



Net Purchases of Tresuries Bonds

-400

-200

-

200

400

600

800

2006 2007 2008 2009 S1

Household sector Rest of the w orld Monetary authority Money market mutual funds Brokers and dealers

Treasuries pruchased by households

-200

-100

-

100

200

300

400

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Savings Ratio [R.H.S]

Us Treasury - Households Sector

The demand for government debt changes… (Internal Demand)

In 2006, 7% of treasuries have been purchased by households…

in 2008, 12% !

Real 10Y Government Yield

-6

-4

-2

-

2

4

6

8

10

12

14

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08

Savings RatioReal 10Y Govt Yield



Holdings of JGB(billion of JPY)

-100 000200 000300 000400 000500 000600 000700 000800 000900 000

1 000 000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20080%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Overseas Non-Fin Corp. Households BoJ Debt / Gdp [R.H.S]

The Japanese exampleJapan Government Debt

-1.002.003.004.005.006.007.008.009.00

10.00

82 84 86 88 90 92 94 96 98 00 02 04 06 080

20

40

60

80

100

120

140

160

180

Govt Bench Bond Yield 10Y Debt / GDP [R.H.S]

In Japan, the increase in debt has not caused a rebound of

government yields…


The capacity to reach a fiscal equilibrium againCan we really trust Governments ?

Net Borrowing in credit Markets(as a percentage of GDP)

-30%

-20%

-10%

0%

10%

20%

30%

40%

70 73 76 79 82 85 88 91 94 97 00 03 06 09

Government Non-Government

Average of Past Cycle Debt / Gdp

0%

10%

20%

30%

40%

50%

60%

70%

80%

We have calculated an average of the Debt / Gdp for different countries

including Canada, Finland or Sweden…

… after a deep recession, we observe a rebound then a decrease

of the government debt

Years to peak0


Yes, we can

The fiscal stimulus avoided new “Great Depression”…Rescue of the banking systemHelp for consumers

…but caused an explosion of budget deficitRecord of budget deficitAnd increase of government debt supply

The increased supply can be absorbed by new demand…Quantitative easing via Central BanksForeign HoldersInternal demand due to increased savings

…if government keeps it credibilityPossibility to the return to equilibriumThe releveraging public sector compensates the deleveraging in the private sector



Excess Return of Us Government Bond Market (against Cash 1 Month Index)

-15%

-10%

-5%

0%

5%

10%

15%

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

US EMU

The US bond market has offered significant excess returns against money market rates

End of the recession and

tightening cycle

Tightening cycle

End of the recession…

Can we really trust Bonds markets ?


Governm ent Bonds Perform ance & Inflation

-5%

0%

5%

10%

15%

20%

86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 080.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

Annual return of US Gvt Bonds CPI (average 12M) [R.H.S]

Governm ent Bonds Perform ance & Monetary Policy

-5%

0%

5%

10%

15%

20%

86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 080.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Annual return of US Gvt Bonds Fed Fund Target Rate [R.H.S]

An increase of inflation causes a negative return of

government bonds…

The last tightening cycle has not had not a direct impact on government bond yields: it is the famous conundrum

The combination of inflation and a tightening cycle put pressure on bond marketsCan we really trust Bonds markets ?



Global G7 CPI

-1.50

-1.00

-0.50

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

98 99 01 02 04 05 06 08 09

Global Government Bond Yield

2.50

3.00

3.50

4.00

4.50

5.00

5.50

98 99 01 02 04 05 06 08 09

Today, global government bond yield is close to its fair value

G7 Bond Valuation Indicator

-2.50

-2.00

-1.50

-1.00

-0.50

0.00

0.50

1.00

1.50

2.00

2.50

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Bargain Area

Expensive Area


US TED Spread-1.00

0.00

1.00

2.00

3.00

4.00

5.00

88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Implied Volatility

0

10

20

30

40

50

60

70

80

04 05 06 07 08

0

10

20

30

40

50

60

70

80

90VDAX VIX

The recession’s end is near…Can we really trust Bonds markets ?

Probability of Recession in US

0%

25%

50%

75%

100%

63 66 69 72 75 78 81 84 87 90 93 96 99 02 05 08NBER Recessions Probability


ISM New Orders

20

30

40

50

60

70

80

88 90 92 94 96 98 00 02 04 06 08

New Orders

US Home Sales

0

200

400

600

800

1000

1200

1400

1600

88 90 92 94 96 98 00 02 04 06 08

US New One family Houses Sold

US Auto Sales

5

7

9

11

13

15

17

19

21

23

93 95 97 99 01 03 05 07 09US Auto Sales

Can we really trust Bonds markets ?… due to technical rebounds


The household leverage reached an all-time high of 133% in 2007 !!!

Real consumption and real debt are

correlated…

How much further will be the deleveraging process

go ?

But the deleveraging process could substantially impact consumer spending…Can we really trust Bonds markets ?


Unemployment Rate

-

2

4

6

8

10

12

95 96 97 98 99 00 01 02 03 04 05 06 07 08

EMU US UK

… and durably affect the labor marketCan we really trust Bonds markets ?

Core CPI & Employment

0

1

2

3

4

5

6

88 90 92 94 96 98 00 02 04 06 08

-800

-600

-400

-200

0

200

400

600

NFP Core CPI

Part time for economic reasons

2%

3%

4%

5%

6%

7%

8%

99 01 03 05 07 09

total employed part time for economic reasons as a percentof all civilian labor force

On the road toa double digit

figure...

The part time has increased

significantly and will put wages under

pressure…



US CPI (yoy)

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

Aug-07 Jan-08 Jun-08 Nov-08 Apr-09 Sep-09 Feb-10 Jul-10

EMU CPI (yoy)

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10

EMU CPI (mom)

-2%

-2%

-1%

-1%

0%

1%

1%

2%

2%


Headline inflation will remain in the comfort zone…

US CPI (mom)

-2%

-2%

-1%

-1%

0%

1%

1%

2%

2%


Seasonal models expect the end of negative

inflation for the months to come

Seasonal models expect the end of negative

inflation for the months to come



Inflation & Commodities

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

CRY (yoy) [R.H.S] CPI

…if commodities prices remain under control

GDP & Commodities

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

CRY (yoy) [R.H.S] GDP

The increase of commodities creates

inflation…

… but also a slowdown of the GDP !


Myth or Reality ?Can we really trust Bonds markets ?

The bonds Crash could become reality…

If central banks lose the control over the money

Injection of the excess reserves in the real economySale of securities & market instability

If governments lose their credibilityExplosion of the debt without return at equilibriumBuyers' strike of Foreign Holders

In the case of the V recoveryIncrease in risky assets and commoditiesInflation via fiscal stimuli

But the bonds crash remains a myth

Credibility of the central banks Success in the financial crisisUnusual coordinationNew framework to control the reserves

Credibility of the governmentsSuccess in the financial crisisPossibility to equilibriumNew structural demand

No domestic inflation riskHigh level of unemploymentThe risk of the WA too strong rebound of commodities leads a new recession


Disclaimer

This document is published purely for the purposes of information, it contains no offer for the purchase or sale of financial instruments does not comprise investment advice and it is not confirmation of any transaction unless expressly agreed otherwise. The information contained in this document was obtained from a number of different sources. Dexia Asset Management exercises the greatest care when choosing its sources of information and passing on this information. Nevertheless errors or omissions in those sources or processes cannot be excluded a priori. Dexia AM cannot be held liable for any direct or indirect damage or loss resulting from the use of this document. The contents of this document may be reproduced only with the prior written agreement of Dexia AM. The intellectual property rights of Dexia AM must be respected at all times.

Warning : If this document mentions the past performances of a financial instrument or index or an investment service, refers to simulations of such past performances or contains data relating to futureperformances, the client is aware that those performances and/or forecasts are not a reliable indicator of future performances.

Moreover, Dexia AM specifies that:• in the case where performances are gross, the performance may be affected by commissions, fees and other charges;• in the case where the performance is expressed in another currency than that of the investor’s country of residence, the returns mentioned may increase or decrease as a result of currency fluctuations.

If this document makes reference to a particular tax treatment, the investor is aware that such information depends on the individual circumstances of each investor and that it may be subject to change in the future.

This document does not comprise any investment research as defined in article 24, §1 of Directive 2006/73/CE dated 10 August 2006 implementing Directive 2004/39/CE of the European Parliament and Council. If this information is a marketing communication, Dexia AM wants to clarify that it was not designed according to the legal requirements to promote the independence of investment research, and it is not subject to any prohibition on dealing prior to the dissemination of the investment research.

Dexia AM invites the investors to always consult the fund prospectus before investing in a fund. The prospectus and other information relating to the fund are available on our site at www.dexia-am.com.


Addresses

LuxembourgDexia Asset ManagementLuxembourg SA136, route d’Arlon1150 LuxembourgTel.: + 352 2797-1

BelgiumDexia Asset ManagementBelgiumrue Royale, 1801000 BruxellesTel.: + 32 2 222 52 42

FranceDexia Asset Management SA40, rue Washington75408 Paris Cedex 08Tel.: + 33 1 53 93 40 00

AustraliaAusbil Dexia LtdVeritas House – Level 23207 Kent StreetSydney NSW 2000Tel.: + 61 2 925 90 200

ItalyDexia Asset ManagementLuxembourg SASuccursale ItalianaCorso Italia 120122 MilanoTel.: + 39 02 31 82 83 62

SpainDexia Asset ManagementLuxembourg SASucursal en EspañaCalle Ortega y Gasset, 2628006 MadridTel.: + 34 91 360 94 75

SwitzerlandDexia Asset ManagementLuxembourg SAsuccursale de Genève2, rue de Jargonnant1207 GenèveTel.: + 41 22 707 90 00

The NetherlandsDexia Asset ManagementNederlands bijkantoorLichtenauerlaan 102-1203062 ME RotterdamTel.: + 31 10 204 56 53

GermanyDexia Asset ManagementLuxembourg SAZweigniederlassung DeutschlandAn der Welle 460422 FrankfurtTel.: + 49 69 7593 8823

BahrainDexia Asset ManagementLuxembourg S.A., Middle EastRepresentative OfficeBahrain Financial Harbour,Financial Center, West HarbourTower, Level 23King Faisal HighwayPO Box 75766ManamaTel.: + 973 1750 99 00

CanadaDexia Asset ManagementLuxembourg SACanadian Representative Office77, King Street WestRoyal Trust Tower (32nd floor)Toronto, OntarioTel.: + 1 416 974 9055

Economy & Finance

Ir bonds crash october