Having dished out the first €800 million of its NextGenerationEU recovery fund to member state projects on Monday, the EU yesterday raised €15 billion by issuing two bonds, to follow up the initial €20 billion generated earlier this month.
The latest investments – a five-year, €9 billion bond and a 30-year, €6 billion instrument – were oversubscribed more than 11 times, the European Commission said yesterday on its website, with investors bidding to offer more than €171 billion worth of the loans.
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The EU is conducting a near-€800 billion fundraising plan to borrow around €150 billion per year to the end of 2026 in order to offer €408 billion in grants and €386 billion in credit lines to member states attempting to rebuild their economies after the pandemic. EU nations must devote at least 37% of their planned ‘recovery and resilience’ spending to green investment.
The commission said U.K. investors led demand for the five-year bond issued yesterday, accounting for 30% of the loans, with Asian funders signing up to lend the EU 18% of the total. That instrument received bids of more than €88 billion, ensuring it was oversubscribed almost 10 times, with the commission adding, fund managers made up 33% of the customers and central banks and other public institutions 30%.
For the longer-term bond, German investors supplied 27% of the signatories to a product which was oversubscribed almost 14 times after receiving offers of more than €83 billion. Fund managers led demand for that one, signing up to offer more than 41% of the credit.
The commission said the EU plans to raise €80 billion this year, to be supplemented by an unspecified amount of short term bills, depending on its NextGenerationEU requirements.
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Source: pv magazine