Europe takes advantage of liquidity and places more debt

Europe takes advantage of liquidity and places more debt
February 21, 2024 – 00:00

As proof that there are idle funds in search of investment opportunities, the European Commission does not stop issuing new bonds.

In the second placement of the year the European Comission It issued another 7,000 million euros in a syndicated operation that attracted the interest of investors who submitted offers worth 67,000 million. The operation was the issuance of a new single-tranche European Union (EU) bond maturing on December 4, 2034.

The 10-year bond has a yield of 3.028%, equivalent to a price of 99.754 and the offers received represented an over-subscription rate of more than nine times, which speaks of the appetite of investors and the liquidity prevailing in the markets. .

Under the terms of the placement, the proceeds from the transaction of this 10-year EU bond will be used to finance community political programs. To date the European Comission has issued approximately 24,000 million euros of its financing objective of 75 billion for the first half of 2024.

It is worth remembering that the European Comission It had just issued 8,000 million euros last January in its first syndicated operation of 2024, a transaction also in double tranche that generated offers from investors worth 81,000 and 99,000 million for two European Union bonds.

The operation had raised 3,000 million euros through a 7-year bond maturing on December 4, 2030 and 5,000 million through a 30-year bond maturing on March 4, 2053.

The community Executive described it as exceptional to investor demand for the transactionwith offers totaling €81 billion for the 7-year bond and €99 billion for the 30-year bond, equivalent to oversubscription rates of approximately 27 and 20 times, respectively.

According to Brussels’ plans, in 2024 the Commission will continue to implement its financing operations using its unified financing approach which sees the financing of different debt programs financed by issuing single-brand EU bonds instead of bonds with Separate labels for individual programs.

To date, the European Commission has issued approximately €13 billion of its financing target of €75 billion for the first half of 2024.

Source: Ambito

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