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European Commission issues €9 billion in its 3rd syndicated transaction of 2026
The European Commission has today raised €9 billion of EU-Bonds in its 3rd syndicated transaction for 2026.
The single-tranche transaction concerned a €9 billion new EU-Bond maturing on 12 December 2036. The 10-year bond was priced 99.342% with a re-offer yield of 3.325%. Bids received were in excess of €118 billion which equals to an oversubscription rate of approximately 13-times.
The transaction marked the first EU syndication using the EU curve as a reference to price the new issuance. This approach reduced pricing risks in a volatile market for participating investors and reflects a natural progression in the EU's funding approach, where the EU Bond curve is now liquid enough to enable such pricing when deemed desirable.
The proceeds of the transaction will be used to finance EU policy programmes most notably in the context of NextGenerationEU and support to Ukraine.
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Today's bond syndication 10-year new Bond Due on 12 December 2036, this bond carries a coupon of 3.250% and came at a re-offer yield of 3.325%, equivalent to a price of 99.342%. The spread to the EU-Bond maturing 12 December 2035 is 13 bps, which is an equivalent spread to mid-swap of 39.3 bps, and 46.3 bps over the Bund due on 15 February 2036 and 21.9 bps below the OAT due 25 May 2036. The final order book was of over €118 billion. The joint lead managers of this transaction were Barclays, DZ, Morgan Stanley, Societe Generale, and UBS. |
The Commission has now issued €45.4 billion of its €90 billion funding target for the first half of 2026. 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 2026 is also available in the EU funding plan. The next transaction in the EU's indicative issuance calendar is an EU-Bill auction on 18 March 2026.
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 repurchase facility is available to EU Primary Dealers since 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 €611.07 billion outstanding in EU-Bonds under the unified funding approach. Of the proceeds raised, over €379 billion has been disbursed to Member States under the NextGenerationEU Recovery and Resilience Facility. A further €76.5 billion has been allocated to other EU programmes benefitting from NextGenerationEU funding. Furthermore, proceeds are being used to finance Ukraine and other EU neighbouring countries. Recent Ukraine support includes €18 billion of disbursements under the EU's 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, and almost €23.2 billion under the €33 billion loan part of the Ukraine Facility (available between 2024 and 2027).*
The EU's total debt outstanding now stands at about €784.06 billion, of which €36.55 billion in the form of EU-Bills.
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* Under the Commission's unified funding approach amounts raised are not necessarily equal to amounts disbursed at a specific point of time.