On Tuesday morning, the institution listed for the first time a bond in the framework of the European recovery plan NextGeneration EU.
This plan was approved by the 27 member states last May and, on 1 June, the Commission announced its intention to issue long-term bonds for an amount of €80 billion this year.
The process is now underway. The bond issued under Luxembourg law, the very first bond under this plan, is worth €20 billion and has a maturity of 10 years.
Proof of investor interest in European debt, it has been oversubscribed 7 times (a total offering of €142 billion). 87% of the total was distributed among European investors, 10% went to Asian investors and the remaining 3% to investors from the Americas.
“It is a great honour to host the listing of this historic bond issue on our stock exchange”, says Julie Becker, CEO of the Luxembourg Stock Exchange. She also insists that “this issue increases the attractiveness of Europe as an investment location and strengthens capital markets activity across the region.”
NextGenerationEU allows the Commission to borrow on the capital markets up to €800 billion in current prices.
The EU plans to borrow at an average rate of €150 billion per year between 2021 and 2026, via long-term bonds and short-term debt securities. These amounts will be disbursed to the states, according to their needs, in the form of loans or grants.
This article was first published on Paperjam.lu in French. It has been translated and edited for Delano.lu.