In the opening quarter of the year the Commission has made strong progress towards its €80 billion funding target for the first half of 2023, raising €39.5 billion in long-term EU-Bonds.

Since January 2023, the Commission is financing the EU’s different policy programmes by issuing single branded EU-Bonds under a unified funding approach. In effect, the move represents an extension of the diversified funding strategy first put into place for borrowing under the NextGenerationEU (NGEU) recovery programme.

In the last edition of this newsletter, we outlined a number of ways in which EU-Bond investors and beneficiaries stand to benefit from the introduction of the unified funding approach. One example of the tangible benefits of the new approach can be found in the EU financial support for Ukraine under the MFA+ programme. In the first 3 months of the year, the Commission has been able to disburse €4.5 billion to Ukraine under MFA+ making use of the structured transaction planning as set out in the Funding Plan for H1 2023. This represents a marked improvement in the coherence of the Commission’s funding programme, and in the speed at which it can transfer funds to Ukraine, showcasing the benefits of the new funding approach.

Some more highlights of the Commission’s funding activities for this quarter are provided by month below.

January 2023

The Commission made a quick start to the funding year, executing two EU-Bond auctions and one EU-Bond syndication in January 2023.

The first transaction of the year took the form of dual-tranche EU-Bond auction raising over €4.5 billion in early January.

The Commission’s first syndication of the year also proved very popular. The 30-year tap raised €5 billion in funds and attracted a high-quality and sizeable orderbook of over €51 billion.

In its second bond auction of the month, the Commission raised €3.5 billion in long-term funds by tapping its 5-year bond due in October 2027 and its 10-year bond due in July 2032.

Through its regular EU-Bills auctions, the Commission issued a further €4.15 billion in short-term paper over the course of the month.

February 2023

In February, the Commission issued €7 billion in a dual-tranche syndicated transaction made up by taps of its 7-year bond due in December 2029 and its 20-year bond due in November 2042. The transaction met with exceptional demand from investors inside and outside of the EU, attracting a final combined orderbook of more than €93 billion.

Later in the month, the Commission raised a further €3.5 billion in long-term funds in an auction tapping its 5-year bond due in October 2027 and its 10-year bond due in July 2032.

In complement, the Commission issued a further €4.33 billion in short term funding across two EU-Bills auctions.

March 2023

The Commission executed two syndicated transactions in March. In the first, the Commission issued €6 billion in long term paper with a bond due in 2034. In the second, the Commission made its first green bond issuance of the year, raising another €6 billion in long term funds via a bond maturing in 2048. The deal proved hugely popular among investors, coming 12 times oversubscribed with a final orderbook of over €73 billion.

In between the two syndications, the Commission raised a further €3.5 billion in EU-Bonds with an EU-Bond auction tapping its 5-year bond due in 2027 and its 10-year bond due in 2032.

In addition, the commission raised €3.82 billion in short term paper over two EU-Bills auctions.