The European Commission (EC) has achieved this Tuesday 6,000 million euros in an eleven-year bond issue which will be used to finance the post-covid recovery fund of the European Union (EU) and macro-financial assistance to Ukraine. This syndicated operation, the third of the year, has registered a demand nine times above the offer, of 54,000 million, as announced by the Community Executive in an informative note.
The titles, which count maturing in 2034 and a coupon of 3.25%have been placed at a repurchase rate of 3.359%, which implies 13 basic points above the midswap and 67.7 basic points more than the German bond -which is the one that is indicated as the safest in the euro area- at same term.
Most of the issue was placed among investors in the United Kingdom (28.9%), France (13.7%), Germany (10%), the Nordic countries (9.6%) and Italy (9.4% ), especially fund managers (37.9%), according to the data provided by the Commission.
Commerzbank, Goldman Sachs Bank Europe, HSBC Continental Europe, Morgan Stanley Europe and Societe Generale acted as directing banks in the operation. “We are pleased to have completed another successful transaction amid volatile market conditions,” said European Budget Commissioner Johannes Hahn in a statement.
With this transaction, the Commission has already raised 30,000 million euros in the markets so far this year, close to 40% of its financing objective of 80,000 million for the first half of the year. Of this financing, most (70,000 million) will go to the recovery fund, which will mobilize some 800,000 million between 2021 and 2026; while the remaining 10 billion will be used to provide aid to Ukraine to cover their most urgent financial needs, within the package of 18,000 million that the EU has agreed to disburse in 2023 for this purpose.
