European Commission successfully places first EU SURE bond in 2021

Submitted by Imogen on 28 January 2021

The European Commission has issued a €14 billion social bond under the EU SURE instrument to help protect jobs and people in work.

The issuing consisted of two bonds, with €10 billion due for repayment in June 2028 and €4 billion due for repayment in November 2050. There was high demand among investors, which once again enabled the Commission to obtain very good pricing conditions. These are being directly passed on to the EU Member States.

Background

The Council has approved a total of €90.3 billion in financial support to 18 Member States under SURE. In 2020, the Commission disbursed a total of €39.5 billion to 15 EU Member States (Italy, Spain, Poland, Greece, Croatia, Lithuania, Cyprus, Slovenia, Malta, Latvia, Belgium, Romania, Hungary, Portugal and Slovakia) following three EU SURE issuances.

2020 funds were raised in three operations, carried out on 20 October 2020, 10 November 2020 and 24 November 2020. All the bonds issued under SURE were largely oversubscribed – between 11.5 and 13 times, resulting in very favourable pricing terms.

The bonds issued by the EU under SURE benefit from a social bond label. This provides investors with confidence that the funds mobilised will serve a truly social objective.

Commissioner Johannes Hahn, in charge of Budget and Human Resources, said:“Today's issuance of SURE bonds is the continuation of a remarkable success story. This issuance has shown again the market's great interest in EU bonds. This is great news for the EU as an issuer. It gives us confidence that we will successfully complete the SURE issuance and launch the NextGenerationEU borrowing and lending programme.”

This is the fourth bond issuance under the EU SURE programme. So far, and thanks to the first three issuances between October to November last year, 15 EU Member States received nearly €40 billion in back-to-back loans under SURE.

Throughout 2021, the Commission will seek to raise a further €35 billion through issuance of EU SURE bonds. The Commission is also due to launch borrowing under NextGenerationEU, the recovery instrument worth €750 billion (in 2018) to help build a greener, more digital and more resilient Europe.

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