EC to issue EUR 20 bln bond for Next Generation EU

EU

Last week in its first NextGenerationEU transaction, the European Commission raised EUR 20 billion via a 10-year bond due on July 4, 2031, to finance Europe's recovery from the coronavirus crisis and its consequences, the Warsaw Business Journal reports citing information posted on ec.europa.eu.

This is the largest-ever institutional bond issuance in Europe, the largest-ever institutional single tranche transaction and the largest amount the EU has raised in a single transaction. The bond has attracted a very strong interest from investors across Europe and the world, thanks to which the commission has obtained very favorable pricing conditions, similarly to the repeatedly successful issuances under the SURE program.

The funds will now be used for the first payments under NextGenerationEU, under the Recovery and Resilience Facility and various EU budget programmes.By the end of 2021, the commission expects to raise some EUR 80 billion in bonds, to be complemented by short-term EU-Bills, as per the funding plan published in June 2021.

The exact amount of both EU-Bonds and EU-Bills will depend on the precise funding needs, and the commission will revise its initial assessment in the autumn. In this way, the commission will be able to fund, over the second half of the year, all planned grants and loans to member states under the Recovery and Resilience Facility, as well as cover the needs of the EU policies that receive NextGenerationEU funding.

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