The funds raised will go towards paying for Luxembourg’s pandemic rescue package and recovery, after a similar bond was issued in April last year. The government received permission from parliament at the start of the pandemic to raise €5bn in capital.

The bond issue was placed at a negative interest rate of -0.045%, the finance ministry said in a statement.

“I am delighted with the success of this operation,” said finance minister Pierre Gramegna (DP). “Thanks to its ‘AAA’ [rating] , Luxembourg has been able to expand its liquidity cushion on favourable terms. The large excess demand is a testament to investor confidence in the strength of our economy and its ability to overcome the covid-19 crisis in an efficient and sustainable manner.”

The loan will raise public debt to €18.5bn--equivalent to a rate below 28% of GDP and in line with a government target not to exceed the 30% threshold.

The Spuerkeess, BIL, BGL BNP Paribas, Barclays and Deutsche Bank were the joint lead managers of the government bond, which will be listed on the Luxembourg Stock Exchange.