July 15 (Bloomberg) -- Germany plans to sell new 30-year bonds at an auction on July 23, after the price of an existing set of securities fell, according to the Bundesbank.

The central bank will issue the 2040 securities instead of selling more of its 2039 bonds ``due to developments in the capital markets,'' the Bundesbank said today on its Web site. German regulations prohibit the government from selling more of an existing 30-year bond if its price is less than 94. The 2039 security has traded below that level since May 14.

``Central banks try to maximize the cash flow they can get from auctions, so if a bond is trading very much below par, the government is going to receive much less than it issues,'' said Vishal Pathak, an interest-rate strategist at BNP Paribas SA in London. ``I'm very, very bullish on German paper. There will be value in this for structural holders like pension funds. Germany has the best fundamentals in European and it's the most liquid market.''

The price of the 4.25 percent bond maturing in July 2039 rose 0.41, or 4.1 euros cents per 1,000-euro ($1,596) face amount, to 92.58 today.

Germany last sold 30-year bonds on Jan. 23, issuing 3.3 billion euros of debt yielding 4.45 percent. The bid-to-cover ratio, a gauge of demand, was 2.1.

To contact the reporter on this story: Kim-Mai Cutler in London at kcutler@bloomberg.net; Anchalee Worrachate in London at aworrachate@bloomberg.net

Last Updated: July 15, 2008 10:25 EDT