Euro – Photo © sergign – Fotolia
(BRUSSELS) – The EU Commission issued a further EUR 8.5 bn Tuesday, EUR 6 bn through a green bond for its recovery programme and EUR 2.5 bn to support Ukraine following Russia’s war against it.
The NextGenerationEU green bond has a 10-year maturity, due on 4 February 2033, and the MFA bond a 30-year maturity, due on 4 March 2053.
With the green bond, the Commission has issued a total of 35.5 billion of NextGenerationEU green bonds to finance green projects under EU Member States’ Recovery and Resilience plans.
Overall, the Commission has issued a total of 96.5 billion in long-term funding under NextGenerationEU in 2022 and 167.5 billion since the start of the programme in June 2021. Of this total, 46.5 billion have been issued since July 2022. This represents 93% of the Commission’s NextGenerationEU funding target for the second half of the year, with further transactions planned to year end as per the funding plan published in June 2022.
As regards the proceeds from the 30-year bond, they will be used to finance the latest instalment of macro-financial assistance (MFA) loans to Ukraine. So far in 2022, the Commission has raised 6.7 billion to finance MFA loans to Ukraine. Today’s transaction follows the disbursement of 1.2 billion in the first half of the year, 1 billion in August and 2 billion in October. A further 500 million is foreseen before year-end.
For 2023, once approved, the up to 18 billion support package the Commission proposed on 9 November will provide further highly concessional loans, to be disbursed in regular instalments. If the legislative package proposed on 09 November is adopted, the Commission will borrow on capital markets using the systems and processes that it uses to finance NextGenerationEU.
On this basis, the Commission has so far paid out nearly 136.55 billion under the Recovery and Resilience Facility and, as of end-June, over 15 billion under other EU programmes which benefit from NextGenerationEU financing. The Commission will continue to use the funds raised to support Europe’s post-pandemic recovery, financing Member States under the Recovery and Resilience Facility as well as via other EU programmes.
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Today’s bond syndication 10-year bond The 10-year bond carries a coupon of 2.75% and came at a re-offer yield of 2.82% providing a spread of 1 bp to mid-swaps, which is equivalent to +72.4 bps over the 10-year Bund due in August 2032 and to 23 bps over the 10-year OAT due in November 2032. The final order book was 42 billion. 30-year bond The 30-year bond carries a coupon of 3.000% and came at a re-offer yield of 3.065% providing a spread of +74 bps to mid-swaps, which is equivalent to 101.9 bps over the 30-year Bund due in August 2052 and to 17.6 bps to the 30-year OAT due in May 2053. The final order book was 29 billion. The joint lead managers of this transaction were Credit Agricole Corporate and Investment Bank, Goldman Sachs Bank Europe, Landesbank Baden-Württemberg, Morgan Stanley Europe and UniCredit Bank. |
