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NextGenerationEU: European Commission raises an additional €5 billion in support for Europe's recovery
In its first bond syndication of 2022, the European Commission recently (08 February 2022) raised a further €5 billion in NextGenerationEU funds on behalf of the EU in yet another successful deal. Due on 6 July 2051, the 30-year bond – executed as an increase to an existing EU-Bond – brings the total financing raised under the programme to €78.5 billion. The Commission's successful placement will help sustain the momentum behind Europe's recovery from the COVID-19 pandemic.
The bond was nearly 13 times oversubscribed, achieving a total order book of €64.1 billion. This strong demand enabled the Commission to place the bond under very good pricing conditions in a sign of the strong confidence of investors in the NextGenerationEU programme.
The Commission complemented this issuance with a further €2.2 billion, 5-year bond to fund back-to-back loans to Portugal under the European Financial Stability Mechanism (EFSM).
Commissioner for Budget and Administration, Johannes Hahn, recently said:
“Today's deal reflects the strength of the EU as an issuer. We executed a benchmark transaction on advantageous terms which is an excellent result. On this basis, the Commission will continue supporting Member States in their efforts to soften the blow of the pandemic and rebuild their economies on a more digital and sustainable foundation.”
Using funds already raised under NextGenerationEU, the Commission has financed some €67 billion in Recovery and Resilience Facility payments to a number of Member States. As of end-December 2021, over €7 billion has further been allocated in support of other EU programmes key to Europe's successful navigation of the digital and green transitions.
The recent deal is the sixth syndicated transaction the Commission has executed under NextGenerationEU. Added to the €2.5 billion raised for the programme via bond auction in January, the deal takes the Commission to €7.5 billion of its €50 billion funding target for the first six months of 2022.
As laid out in its issuance calendar for the first half of the year, the Commission intends to execute a further four syndicated transactions between March and June 2022. Syndicated transactions will be complemented by further monthly EU-bond auctions. Short-term funding will also continue to be raised in two EU-bills auctions per month, giving the Commission additional flexibility to meet its payment needs.
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