With an issue volume of €1.5b and a negative interest rate of -0.123%, the bond is the first of its kind to meet new EU green finance rules and will help finance and refinance sustainable projects of a social and green nature.

“The huge success of this first issuance of a sovereign sustainability bond by a European country proves that Luxembourg has put in place a credible and comprehensive framework for sustainable finance and underlines the potential of this new category of sovereign bonds, of which Luxembourg is the pioneer,” Luxembourg finance minister Pierre Gramegna (DP) said in a statement issued on Tuesday.

The bond, which has a 12-year maturity, will be listed on the Luxembourg Stock Exchange, the world's leading platform for green and sustainable bonds. 

BCEE, BIL, BGL BNP Paribas, Société Générale and Deutsche Bank contributed to the transaction as joint lead managers.