GERMANY - The Bundes-Pensions-Service für Post und Telekommunikation, a pension fund for former post and telecoms workers, has launched a sale of €6bn in euro-dominated bonds backed by pension obligations.

According to sources at Morgan Stanley and Deutsche Bank, the deal’s main bookrunners, an international roadshow for BPS-PT’s bond sale began today. The banking sources also said the bonds, which are mainly intended for institutional investors, would likely be offered with maturities of five, ten and 15 years.

The rating agency Standard & Poor’s has already assigned BPS-PT’s bonds a triple ‘A’ rating. S&P said its rating was based on the fact that the government must by law ensure that the fund meets its pension obligations.

Created in 2001, the government-controlled BPS-PT pays out corporate pensions to 270,000 former postal and telecoms employees, all of whom were civil servants. The pensions are financed via contributions from telecoms giant Deutsche Telekom, postal giant Deutsche Post and the retail bank Deutsche Postbank, which are all now privatised.

BPS-PT is controlled by the German government, which appoints its board of directors. If any gaps in the financing of BPS-PT’s pensions emerge, the government is legally obliged to close them with cash from the federal budget.

However, the German finance ministry has engineered BPS-PT’s bond sale to avoid having to close a funding gap of €5.45bn that would worsen the government’s budget woes.

The federal deficit is expected to reach €40bn in 2005, making it increasingly difficult for Germany as a whole to meet the Maastricht deficit criterion of 3%.