EU’s Latest Bond Sale Racks Up Another $100 Billion Orderbook

The European Union returned to the bond market on Tuesday for a seven-year debt sale, pulling in another huge orderbook, Bloomberg News reported. The nation racked up more than 85 billion euros ($100 billion) of orders for a 9 billion-euro offering of bonds maturing in 2028 via banks, with pricing set at 14 basis points below swaps. Analysts had expected a rush of orders from investors because the bonds are relatively scarce and the central bank is able to buy up to 50% of the EU’s issuance, providing a guaranteed backstop. While the demand was slightly lower than seen for a similar five-year sale in June, the bloc’s orderbooks have consistently been among the biggest in the region. The sale is the next stage of NextGenerationEU stimulus, and the EU will also start selling short-dated bills for the first time on Wednesday. “As the EU comes more regularly to the market, there is less of an incentive to overstate one’s orders,” said Antoine Bouvet, senior rates strategist at ING Groep NV, who had expected 10 billion euros of the social bonds to be sold. “The novelty has worn off now they’re a regular issuer.” It’s part of a program aiming to raise about $1 trillion of debt over five years to finance grants and loans to member states. Almost a third of the roughly 800 billion euros will be in green bonds, which the bloc will start to sell in October. Read more.
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