EU Commission places another 9 billion on the market

There European Commission announced the seventh syndicated issue of 2024placing 5 and 30 year bonds and collecting overall 9 billion of euros. The transaction, in two tranches, involved a new 5-year bond for a value of 5 billion euros and the reopening of the 30-year bond for a value of 4 billion euros. The proceeds of the transaction will be used to finance EU programmes, in particular in the context of NextGenerationEU and the funds to support Ukraine.

Bond Features

The first issue concerned a Five-year bond, due October 5, 2029coupon of 2.875% and performance of re-offer of the 2.952%equivalent to a price of 99.640%. The spread over the mid-swap is 11 basis points, which is equivalent to 43 bps over the German Bund maturing on November 15, 2029 and 1 bps over the OAT (French government bond) maturing on November 25, 2029. The U has placed an amount of 5 billion euros, compared to a very high demand for: the final order book it was of over 66 billion of Euro.

The reopening of the 30-year bond, due October 5, 2054has a coupon of 3.375% and a 3.751% re-offer yieldequivalent to a price of 96.418%. The spread at mid-swap is 103 basis points, which is equivalent to 85 basis points over the Bund maturing on August 15, 2054 and 8 basis points over the OAT maturing on May 25, 2054. With a placed amount of 4 billion, the final order book was over 80 billion of Euro.

For both placements, the joint lead managers of the transaction are Bank of America, BNP Paribas, DZ Bank, Morgan Stanley and Nomura.

The 2024 emissions plan

The Commission has 9 billion euros issued so far of its funding target for the second half of 2024which has an amount of 65 billion of euros. The next transaction on the calendar is a European bond auction scheduled for July 15, 2024.

With today’s operation, The EU has so far issued €375 billion in European bonds. Of the proceeds raised, almost €235 billion were disbursed to Member States under their respective NRRPs (NextGenerationEu). Another €59 billion were allocated to other European programmes benefiting from funding NextGenerationEU. In addition, over EUR 8 billion was disbursed to Ukraine in 2024 under the dedicated financing instrument. support for Ukrainecomplementing the €18 billion disbursed under the macro-financial assistance policy in 2023.

As the Commission is engaged in operations of short-term liquidity managementto facilitate future financing needs, the amounts collected will not necessarily be equal to those disbursed.

Total outstanding debt of the EU now amounts to 543 billion eurosof which around €20 billion in the form of EU invoices.