The European Commission has raised today €11 billion of EU-Bonds in its 9th syndicated transaction for 2025.
The dual-tranche transaction concerned a €5 billion tap of the EU-Bond maturing on 13 December 2032 and a new €6 billion EU-Bond maturing on 12 December 2040. The 7-year bond was priced 99.114% with a re-offer yield of 2.889%, while the new 15-year bond was priced at 99.518%, with a re-offer yield of 3.666%. Bids received were in excess of €96 billion on the 7-year bond and in excess of €79 billion on the new 15-year bond. This equals oversubscription rates of approximately 19-times and 13-times, respectively.
The proceeds of the transaction will be used to finance EU policy programmes most notably in the context of NextGenerationEU and support to Ukraine.
Todays bond syndication 7-year Bond tap Due on 13 December 2032, this bond carries a coupon of 2.750% and came at a re-offer yield of 2.889%, equivalent to a price of 99.114%. The spread to mid-swap is 34 bps, which is equivalent to 42.2 bps over the Bund due on 15 August 2032 and -26.7 bps below the OAT due 25 November 2032. The final order book was of over €96 billion. New 15-year Bond Due on 12 December 2040, this bond carries a coupon of 3.625% and came at a re-offer yield of 3.666%, equivalent to a price of 99.518%. The spread to mid-swap is 75 bps, which is equivalent to 55.2 bps over the Bund due on 15 May 2041 and -30.7 bps below the OAT due 25 May 2040. The final order book was of over €79 billion. The joint lead managers of this transaction were BNP, Citi, Deutsche Bank, DZ Bank and Santander. Commerzbank, Danske, Intesa, KBC, Natixis, UBS and Unicredit acted as co-leads |
The Commission has now issued €46.12 billion of its €70 billion funding target for the second half of 2025. A full overview of all EU transactions executed to date is available online. A detailed overview of the EUs planned transactions for the second half of 2025 is also available in the EU funding plan. The next transaction in the EUs indicative issuance calendar is an EU-Bill auction on 15 October 2025.
Background
The European Commission is empowered by the EU Treaties to borrow from the international capital markets on behalf of the European Union to finance selected EU policy programmes. It is a well-established name in debt securities markets, with a track record of bond issuances over the past 40 years. All issuances executed by the European Commission are denominated exclusively in euro. All EU borrowing is guaranteed by the EU budget, and contributions to the EU budget are an unconditional legal obligation of all Member States under the EU Treaties.
Since January 2023, the EU funds its different policy programmes by issuing single-branded EU-Bonds rather than separately labelled bonds for individual programmes. This follows the creation of a unified funding approach, extending the diversified funding strategy first established in 2021 for NextGenerationEU to other policy programmes funded by EU borrowing.
To finance EU policies as efficiently and effectively as possible, the Commissions issuances are structured by semi-annual funding plans and pre-announced issuance windows. In parallel, a framework incentivising EU Primary Dealers to provide quotes on EU securities on electronic platforms is in place since November 2023 and a repurchase facility is available to EU Primary Dealers since October 2024 to support the secondary market liquidity through the use of EU-Bonds in repurchase agreements.
With todays transaction, the EU has now outstanding €544.31 billion in EU-Bonds under the unified funding approach. Of the proceeds raised, over €352.50 billion has been disbursed to Member States under the NextGenerationEU Recovery and Resilience Facility. A further €75.39 billion has been allocated to other EU programmes benefitting from NextGenerationEU funding. Furthermore, almost €19.25 billion has been disbursed to Ukraine under the Ukraine Facility that will finance up to €33 billion in loans to Ukraine between 2024 and 2027. In addition, €14 billion has recently been disbursed under the new €18 billion EU exceptional Macro Financial assistance loan which will be repaid with proceeds from immobilised Russian State assets as part of the G7-led Extraordinary Revenue Acceleration (ERA) loans initiative.*
The EUs total debt outstanding now stands at about €722.44 billion, of which €32.85 billion in the form of EU-Bills.
Information on the allocation on the investors in this transaction is available in the transactions section of the EU as a borrower website. More information on EUs issuance activities is available here: The EU as a borrower – investor relations - European Commission (europa.eu)
* Under the Commissions unified funding approach amounts raised are not necessarily equal to amounts disbursed at a specific point of time.
