EU Bond Demand Tops $200 Billion, More Than 10 Times Sale Amount

The European Union notched up more than 171 billion euros ($203 billion) of orders for its second sale under its NextGenerationEU program, expanding efforts to build a curve of securities dedicated to funding its recovery from the coronavirus pandemic.

The EU offered nine billion euros of five-year debt and six billion euros of 30-year debt Tuesday, meaning that orders topped the amount available more than tenfold, even though demand for each security fell shy of its first sale of 10-year bonds earlier this month.

“The pricing like last time round is really rather good,” said Gert Jan Koopman, the EU Commission’s director-general for budget, in a panel. “The market is interested in these products, which are safe triple-As allowing a pickup to the bund,” he added, referring to Germany’s bonds that are widely seen as the benchmark for the region.

The offering is part of program aiming to raise $1 trillion of debt over five years to finance grants and loans to member states. More issuance is slated by the end of July, while green bonds may come later in the year.

EU Bond Demand Tops $200 Billion, More Than 10 Times Sale Amount

The EU debuted a 20-billion-euro sale of 10-year securities earlier this month, where order books hit 142 billion euros, just short of the 145 billion euros for a similar-dated social bond last year. The 10-year offering was notable for the exclusion of 10 banks, eight of which have since been cleared to participate.

The five-year issue was given final terms of 11 basis points below mid swaps and received orders in excess of 88 billion euros, while the 30-year was 22 basis points above and attracted more than 83 billion euros of demand.

Four of the cleared banks -- Credit Agricole CIB, Deutsche Bank AG, JPMorgan Chase & Co. and UniCredit SpA -- have been appointed joint lead managers along with Goldman Sachs Group Inc. for Tuesday’s sale.

“The focus on creating a liquid curve should attract a wide set of investors,” said Peter McCallum, rates strategist at Mizuho. McCallum expected to see “substantial demand even with a more conventional new issue premium.”


There are at least five deals pricing today, including the NextGenerationEU one.

  • Sovereigns have raised a record 30.5% of market-wide issuance in Europe so far this year, according to data compiled by Bloomberg
  • Repsol is offering two sustainability-linked notes in what is the company’s first offering under its new transition financing framework
  • ECB officials are gearing up for a new phase of crisis response where their ultra-loose monetary stimulus becomes an increasingly lonely effort while the rest of the world moves on


Asian companies lead a charge of dollar-bond deals on Tuesday after the two sovereigns -- the Philippines and Mongolia -- from the region headlined more than $6 billion of offerings in the U.S. currency on Monday.

  • There were at least eight issuers seeking to price notes in dollars including China National Bluestar Group Co. and Korea’s Mirae Asset Securities
  • Renault SA priced 150 billion yen ($1.36 billion) of debt, marking its first issuance in the Samurai debt market since 2018
  • In Indonesia, investors are rushing into dollar notes of companies that may be least affected by soaring coronavirus infections, such as electricity and staple food firms, and that’s helping keep yield premiums down despite the grim virus outlook
  • Click here for the Asia Bondwrap


Three borrowers including South Korea’s LG Chem combined to price $2.7 billion of investment-grade bonds on Monday, kicking off what’s expected to be a relatively subdued week of issuance.

  • Dealers estimate about $15 billion will price this week ahead of the July 4 holiday
  • In the U.S. high-yield bond market, just one company sold bonds. MidCap Financial Issuer Trust had no trouble tightening its deal while paying zero in terms of new issue concessions, as it had the primary market all to itself

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