European Commission issues €8 billion in its 4th syndicated transaction of 2025

This article is brought to you in association with the European Commission.

The European Commission has today raised €8 billion of EU-Bonds in its 4^th syndicated transaction for 2025.

The dual-tranche transaction concerned a €5 billion tap of the EU-Bond maturing on 4 July 2028, and a €3 billion tap of the EU-Bond maturing on 4 October 2052. The 3-year bond was priced 101.052% with a re-offer yield of 2.283%, while the 30-year bond was priced at 77.217%, with a re-offer yield of 3.859%. Bids received were in excess of €41 billion on the 3-year bond and in excess of €45 billion on the 30-year bond. This equals oversubscription rates of approximately 8-times and 15-times, respectively.

The proceeds of the transaction will be used to finance EU policy programmes most notably in the context of NextGenerationEU and support to Ukraine.

The Commission has now issued approximately €52.92 billion of its €90 billion bond issuance target for the first half of 2025. A full overview of all EU transactions executed to date is available online. A detailed overview of the EU’s planned transactions for the first half of 2025 is also available in the EU funding plan. The next transaction in the EU’s indicative issuance calendar is an EU-Bill auction on 16 April 2025.

Background

The European Commission is empowered by the EU Treaties to borrow from the international capital markets on behalf of the European Union to finance selected EU policy programmes. It is a well-established name in debt securities markets, with a track record of bond issuances over the past 40 years. All issuances executed by the European Commission are denominated exclusively in euro. All EU borrowing is guaranteed by the EU budget, and contributions to the EU budget are an unconditional legal obligation of all Member States under the EU Treaties.

Since January 2023, the EU funds its different policy programmes by issuing single-branded EU-Bonds rather than separately labelled bonds for individual programmes. This follows the creation of a unified funding approach, extending the diversified funding strategy first established in 2021 for NextGenerationEU to other policy programmes funded by EU borrowing.

To finance EU policies as efficiently and effectively as possible, the Commission’s issuances are structured by semi-annual funding plans and pre-announced issuance windows. In parallel, a framework incentivising EU Primary Dealers to provide quotes on EU securities on electronic platforms is in place since November 2023 and a new repurchase facility is now made available to EU Primary Dealers as from 7 October 2024 to support the secondary market liquidity through the use of EU-Bonds in repurchase agreements.

With today’s transaction, the EU has now issued €483.33 billion in EU-Bonds under the unified funding approach. Of the proceeds raised, almost €298 billion has been disbursed to Member States under the NextGenerationEU Recovery and Resilience Facility. A further €72.04 billion has been allocated to other EU programmes benefitting from NextGenerationEU funding. Furthermore, almost €16.20 billion has been disbursed to Ukraine under the Ukraine Facility that will finance up to €33 billion in loans to Ukraine between 2024 and 2027. In addition, €4 billion has recently been disbursed under the new €18 billion EU exceptional Macro Financial assistance loan which will be repaid with proceeds from immobilised Russian State assets as part of the G7-led Extraordinary Revenue Acceleration (ERA) loans initiative.*

The EU’s total debt outstanding now stands at about €658.38 billion, of which €29.69 billion in the form of EU-Bills.

Information on the allocation on the investors in this transaction is available in the transactions section of the EU as a borrower website. More information on EU’s issuance activities is available here: The EU as a borrower – investor relations – European Commission (europa.eu)

* Under the Commission’s unified funding approach amounts raised are not necessarily equal to amounts disbursed at a specific point of time.