The European Commission has issued this Wednesday, February 15, 7,000 million euros in European Union (EU) bonds, in its second syndicated operation for 2023, which consists of an extension of the EU bond to 7 years maturing on February 4. December 2029 and a 20-year bond extension due November 4, 2042 to support Recovery and Resilience funds and macro-financial assistance to Ukraine.
Investors have shown great interest in EU bonds, with each of the two tranches being oversubscribed, with 14 times for the 7-year issue and more than 12 times for the 20-year issue.
This Tuesday’s syndicated transaction was the second carried out based on the unified financing approach that the Commission has introduced as the main financing method as of January 2023.
With this transaction the Commission has already raised €20 billion of its €80 billion funding target for the first half of 2023 to support the NextGenerationEU recovery program and the macro-financial assistance program for Ukraine.
This includes two bond auctions totaling €8.2bn held in January and early February, as well as €5bn in the first syndicated deal of the year. Of the financing objective of 80,000 million euros, some 70,000 million will go to the Recovery Plan and some 10,000 million to Ukraine.
Specifically, the 7-year bond has a coupon of 1.625% and has been offered at a yield of 2.92%, equivalent to a price of 92,130 euros and with a final order book of more than 42,000 million.
For its part, the 20-year bond carries a coupon of 3.375% and was produced at a reoffer yield of 3.260%, equivalent to a price of 101,638 euros and with a final order book of more than 51,000 million euros.
The joint directors of this transaction were Barclays, BofA Securities Europe, Citigroup Global Markets Europe, Credit Agricole Corporate and Investment Bank and Deutsche Bank.