Sales of EU pandemic stimulus bonds could resume in mid-2022

The European Union could increase bond issuance to fund its post-pandemic recovery in the second half of this year.

The bloc plans to sell 50 billion euros ($56 billion) of so-called NextGenerationEU bonds in the first six months of 2022, and potentially “a little more” in the second half, Budget Commissioner Johannes Hahn said on Tuesday. to journalists in Brussels.

The EU is on track to raise around 150 billion euros a year by 2026 under its recovery program, which funds grants and loans to member states. It has already issued 73.5 billion euros of such bonds, according to data from the European Commission.

“We are still facing a very positive reaction in the capital market, there is strong interest,” Hahn said, after traveling to Saudi Arabia and the United Arab Emirates this month to promote the bonds. “We have now established all the different elements, not only the syndicated shows, but also the auctions. We have these short-term European invoices, which also helps us to meet all the necessary requirements. »

Hahn said he expects payments to member states to peak next year and the year after. The short-term European bills give the commission “some leeway to act in case we need at a very short notice more than what is currently calculated,” Hahn said.

The EU raised €2.5bn in its first green auction yesterday, following its first €12bn green bond sold through syndication in October. It attracted record demand and was the largest transaction ever in the booming sustainable debt market. About 30% of the stimulus money will go to environmental projects, making it the biggest green emitter.

“We have different possibilities, and depending on the circumstances, it’s up to our experts to decide which type of measurement is chosen for the next show,” Hahn said.

Sallie R. Loera