The European Commission raised €11 billion in its ninth syndicated deal of 2025, via a €5 billion tap of the 13 December 2032 EU-bond and a new €6 billion 12 December 2040 paper.
According to James Athey, fixed income fund manager at Marlborough, this is “customary for primary issuance of anything with spread – the books were sizeable relative to the amount on offer.”
According to market sources final demand was in excess of €175 billion, with €96 billion for the 7-years and €79 billion for the new 15-years, implying overall coverage of 15.9 times.
Regarding pricing the 2032 tap (2.75% coupon) re-offered at 99.114 to yield 2.889% and priced at mid-spread (ms) +34 basis points (bp); the new 2040 (3.625% coupon) was re-offered at 99.518 to yield 3.666% and priced at ms +75bp. Guidance was ms +36bp area and ms +77bp area, respectively.
Athey told The Desk: “Both bonds are trading solidly since and there seems to be decent follow through demand from real money given low allocations as a result of the book size. That being said there hasn’t been much spread tightening at all.”
According to the European Commission, this was the EU’s ninth syndicated transaction this year. With this sale, the EC has now executed a substantial portion of its H2 2025 plan to issue €70 billion in EU-Bonds, complementing bills and auctions.
Proceeds are raised under the EU’s unified funding approach: There is a single EU-bonds label that finances multiple programmes including the recovery and resilience facility / next generation EU and support to Ukraine), with allocations made from a central pool.
Athey clarified the trading in this type of paper saying: “In general EU paper is in demand but we are still a long way from these bonds being genuinely viewed as benchmark exposure in the EZ and that’s unlikely to change unless the nation states can agree to a more systematic and permanent program of common issuance – something we remain highly sceptical about because of the politics and legalities of doing so. Thus, EU remains within the SSA bucket as opposed to the rates bucket and that means it is the sort of paper which largely ends up on back books impeding secondary liquidity relative to the more actively trade govvies’ markets.”
©Markets Media Europe 2025
