The €3bn euro bonds consist of two parts: the first tranche of €1.25bn has a maturity of 10 years and a coupon of 3%, while the second tranche of €1.75bn has a maturity of 20 years and a coupon of 3.25%. The subscription book was opened on Wednesday 22 February.
With the new sovereign bonds, Luxembourg’s public debt will amount to €21.9bn, or 26.4% of its GDP. But these will be used to pre-finance the repayment of €2bn in bonds that were issued in 2013. This repayment will take place in July 2023, at which time Luxembourg’s debt will decrease to €19.9bn, or 26% of its GDP. The trajectory in the 2023 budget is thus respected, stated the finance ministry in a press release.
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“The State Treasury constantly monitors the debt capital markets, as well as the liquidity situation, and assesses any potential need for future issuances, within the limits of the issuance authorisations as defined by the budget law. At this point, no further issuance is planned,” said a spokesperson from the finance ministry, when contacted by Delano.
Spuerkeess, BIL, BGL BNP Paribas, Société Générale and Deutsche Bank contributed to the operation as joint lead managers, and the bonds will be listed on the Luxembourg Stock Exchange.