The opening quarter of the year saw increasingly challenging market conditions as the Commission set out to make progress on its €50 billion long-term funding target for H1 2022. Notwithstanding this, the Commission successfully executed in Q1 2022 two syndicated transactions and three bond auctions, strengthening the growing role of EU bonds as a reference benchmark in the euro market.

With the transactions, the Commission provided a further €22.5 billion in funding for its NGEU instrument, as well as a respective €2.17 and €2.2 billion in support for its SURE and EFSM programmes, adding further momentum to Europe’s resilience and recovery from the coronavirus crisis.

As in 2021, the Commission also continued to raise short-term funding via two EU bills auctions per month, maintaining a regular presence in the markets and giving it the required flexibility to meet its payment needs.

In addition to the above, the Commission undertook two private placements in March for a combined total of €600 million to finance MFA loans to the Ukrainian authorities. The amounts were raised and transferred in record time (opening of transaction to disbursement in 3 days) and on very competitive terms.

A breakdown of the Commission’s syndicated and auction funding activities for the quarter is provided by month below. 

January 2022 

The Commission got 2022 off by executing its first ever green bond auction, a tap of the €12 billion, 15-year NGEU green bond issued in October 2021. Raising €2.5 billion in long-term funding, the tap was executed via auction, attracting €3.7 billion in bids for a cover ratio of 1.49.

The Commission also made a strong start to its short term funding operations, raising €2.5 billion in 3-month bills and a further €2.5 billion in 6-month bills over the course of two EU-bills auctions. 

February 2022

In its first syndicated issuance of the year, the Commission executed a dual-tranche transaction made up by a €5 billion, 30-year NGEU bond and a €2.2 billion, 5-year EFSM bond. The long tenured NGEU issue proved particularly attractive here, achieving an order book of €64.1 billion. In addition, the Commission raised a further €2.5 billion in long-term NGEU funding by tapping the 5-year NGEU bond issued in July 2021 via an auction.

Staying consistent with its funding schedule, the Commission executed two further EU-Bills auctions, issuing €2.5 billion in 3-month bills and €2.5 billion in 6-month bills. 

March 2022 

The Commission followed up its dual tranche transaction in February with another in March, this time raising €10 billion in a 10-year NGEU bond, and €2.17 billion in a 15-year SURE bond. Taking place against a backdrop of rising inflation and Russian’s invasion of Ukraine, the transaction proved a testament to the EU’s strength in the market, with the NGEU bond 6 times oversubscribed and the SURE bond 15 times oversubscribed.

The Commission complemented its 10-year NGEU issue with an auction taping the 7-year NGEU transaction it executed last September, raising a further €2.5 billion in long-term funding.

As in January and February, the Commission added to its short-term funding with two EU-Bills auctions, raising €5 billion in 3-month bills and €3billion in 6-month bills. 

For a more detailed account of the Commission’s transaction data since the beginning of NGEU, please consult the NextGenerationEU transactions data tab on the EU as a borrower website.