The European Commission has today raised a further €9 billion to support Europe’s recovery from the coronavirus crisis and its consequences, through the fourth NextGenerationEU bond issuance
since the start of the programme in mid-June. The European Commission issued a 7-year bond due on 04 October 2028. The bond was largely oversubscribed – over 11 times, with books
exceeding €103 billion.
The strong demand confirms the ongoing interest by investors in EU securities, which enabled the Commission to place the bonds under very favourable pricing conditions, fully in line with the
remarkable performance of the NextGenerationEU programme so far.
Commissioner in charge of Budget and Administration, Johannes Hahn, said: With the fourth transaction under NextGenerationEU, we have built on the success of the initial deals. This
transaction allows the Commission to maintain a steady flow of funding to our Member States, to support the recovery and help rebuild a greener, more digital and more resilient Europe.
This is the fourth transaction under the NextGenerationEU programme, following the €20 billion 10-year bond that the Commission issued on 15 June 2021; the dual-tranche transaction of €15
billion from 29 June 2021 – that consisted of a €9 billion 5-year bond and a €6 billion 30-year bond, and the €10 billion 20-year bond issued on 13 July 2021.
Following today’s transaction, the Commission has so far raised €54 billion under NextGenerationEU.
On that basis, the Commission has already made the first payments to a number of Member States under the Recovery and Resilience Facility and other EU budget programmes.
In the course of 2021, the Commission expects to raise some €80 billion in bonds, to be complemented by short-term EU-Bills, as announced in the
funding plan published in June 2021 and updated in September 2021.
The Commission will issue EU-Bills exclusively via its new auction platform.
The first EU-Bills auction is planned to take place on 15 September 2021.
As announced earlier this month in
its detailed issuance calendar for 2021, the Commission will
hold two more syndicated transactions by the end of the year, in October and November. Following the release of the
NextGenerationEU Green Bond Framework earlier in September, the Commission is preparing to issue the first NextGenerationEU
Green Bond. Once completed, the NextGenerationEU green bond programme will turn the EU into the world’s biggest green bond issuer.
Background
NextGenerationEU is a temporary recovery instrument of more than €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.
To finance NextGenerationEU, the European Commission – on behalf of the EU – will raise from the capital markets around €800 billion between now and end-2026. €421.1 billion will be available
mostly for grants (under the Recovery and Resilience Facility and other EU budget programmes); €385.8 billion for loans. This will translate into borrowing volumes of an average of roughly €150
billion per year.
This strategy relies on a mix of long- and short-term issuances via syndicated and auction formats to enable the Commission to raise funds flexibly and on the most advantageous terms under
prevailing market conditions.
