NextGenerationEU: Fourth bond issuance maintains strong momentum for EU borrowing for recovery

(Source: European Commission)

Updated on 15.09.21 at 13.11

The European Commission has today raised a further €9 billion to support Europe’s recovery from the coronavirus crisis and its consequences, through the fourth NextGenerationEU bond issuance since the start of the programme in mid-June. The European Commission issued a 7-year bond due on 04 October 2028. The bond was largely oversubscribed – over 11 times, with books exceeding €103 billion.

The strong demand confirms the ongoing interest by investors in EU securities, which enabled the Commission to place the bonds under very favourable pricing conditions, fully in line with the remarkable performance of the NextGenerationEU programme so far.

Commissioner in charge of Budget and Administration, Johannes Hahn, said: ”With the fourth transaction under NextGenerationEU, we have built on the success of the initial deals. This transaction allows the Commission to maintain a steady flow of funding to our Member States, to support the recovery and help rebuild a greener, more digital and more resilient Europe.

This is the fourth transaction under the NextGenerationEU programme, following the €20 billion 10-year bond that the Commission issued on 15 June 2021; the dual-tranche transaction of €15 billion from 29 June 2021 – that consisted of a €9 billion 5-year bond and a €6 billion 30-year bond, and the €10 billion 20-year bond issued on 13 July 2021.

Following today’s transaction, the Commission has so far raised €54 billion under NextGenerationEU.

On that basis, the Commission has already made the first payments to a number of Member States under the Recovery and Resilience Facility and other EU budget programmes.

In the course of 2021, the Commission expects to raise some €80 billion in bonds, to be complemented by short-term EU-Bills, as announced in the funding plan published in June 2021 and updated in September 2021.

The Commission will issue EU-Bills exclusively via its new auction platform. The first EU-Bills auction is planned to take place on 15 September 2021.

As announced earlier this month in its detailed issuance calendar for 2021, the Commission will hold two more syndicated transactions by the end of the year, in October and November. Following the release of the NextGenerationEU Green Bond Framework earlier in September, the Commission is preparing to issue the first NextGenerationEU Green Bond. Once completed, the NextGenerationEU green bond programme will turn the EU into the world’s biggest green bond issuer.


NextGenerationEU is a temporary recovery instrument of more than €800 billion in current prices to support Europe’s recovery from the coronavirus pandemic and help build a greener, more digital and more resilient Europe.

To finance NextGenerationEU, the European Commission – on behalf of the EU – will raise from the capital markets  around €800 billion between now and end-2026. €421.1 billion will be available mostly for grants (under the Recovery and Resilience Facility and other EU budget programmes); €385.8 billion for loans. This will translate into borrowing volumes of an average of roughly €150 billion per year.

To raise the necessary funding under the best possible market conditions, the Commission has started to implement a diversified funding strategy.

This strategy relies on a mix of long- and short-term issuances via syndicated and auction formats to enable the Commission to raise funds flexibly and on the most advantageous terms under prevailing market conditions.

Technical section

Fourth NextGenerationEU bond issuanceThe 7-year bond carries a coupon of 0.00% and came at a re-offer yield of -0.28% providing a spread of -14 bps to mid-swaps, which is equivalent to +20.8 bps over the 7-year Bund due in November 2028 and to +0.9 bps over the 7-year OAT due in November 2028.The final order book was of over €103 billion, which meant that the bond has been almost 11 times oversubscribed. This transaction therefore marks the second* largest order book size for a sub 10-year deal to date across both NextGenerationEU and SURE programmes.The joint lead managers of this transaction were Goldman Sachs Bank Europe SE, Landesbank Baden-Württemberg (LBBW), Morgan Stanley Europe SE, NatWest Markets N.V. and Société Générale S.A.

Investors’ profile 

By Geography

UK 39%
Benelux 11%
Nordics 10%
France 8%
Asia 7%
Germany 7%
Italy 6%
Other Europe 6%
Spain/Portugal 4%
Rest of World 2%
TOTAL 100%

By Investor Type

Fund Managers 36%
Central Banks / Official Institutions 32%
Bank Treasuries 21%
Insurance and Pension Funds 7%
Banks 2%
Hedge Funds 2%
TOTAL 100%

For More Information

Press release Green Bond framework and updated funding strategy

Q&A Green Bond framework and updated funding strategy

Announcement of the first EU-Bills auction on 15 September

Press release first NextGenerationEU bond

Press release Commission’s first funding plan

Q&A diversified funding strategy

Factsheet – NextGenerationEU – Funding strategy

EU as a borrower website

Primary Dealer Network

Recovery plan for Europe

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