EU nets €10bn in bond issue; €45bn raised so far

The European Commission on Monday issued a further €10 billion to support Europe’s recovery from the coronavirus crisis and its consequences, the Commission said in a statement.

It is the third NextGenerationEU bond since the start of the programme in mid-June; €45 billion have been raised so far with the issuance.

NextGenerationEU is a temporary recovery instrument of some €800 billion in current prices to support Europe’s recovery from the coronavirus pandemic and help build a greener, more digital and more resilient Europe, the statement said.

The Commission issued a 20-year bond due on 4 July 2041, which was welcomed by the market with a very strong interest, with books close to €100 billion. Thanks to the almost 10-fold oversubscription, the Commission has obtained very favourable pricing conditions, in line with the strong performance of the NextGenerationEU programme so far.

This was a dual-tranche transaction, and the Commission raised further €5.25 billion in 10-year back-to-back loan due 22 April 2031 for its European Financial Stabilisation Mechanism (EFSM) and Macro-Financial Assistance (MFA) programmes, the statement said.

Commissioner in charge of Budget and Administration, Johannes Hahn, said: ”The third NextGenerationEU bond takes the total raised for NextGenerationEU to €45 billion in four weeks. This represents a very encouraging start to the NextGenerationEU funding programme. It means that the Commission is well-placed to support all planned NextGenerationEU payments to Member States over the summer, thereby supporting the economic and social recovery.”

This is the third transaction under the NextGenerationEU programme, following the €20 billion 10-year bond that the Commission issued on 15 June 2021 and the dual-tranche transaction of €15 billion – that consisted of a €9 billion 5-year bond and a €6 billion 30-year bond – from 29 June.

The first disbursement under NextGenerationEU already took place at the end of June, and was carried out under the REACT-EU programme. The first payments under the Recovery and Resilience Facility will follow in due course, after the approval by the Council of the national Recovery and Resilience Plans (12 of which have already passed this stage) and the signature of the respective financing and/or loan agreements by EU Member States and the European Commission.