After the avalanche of requests that arrived in the first issue, the EU is preparing for second placement of the community bonds needed to finance Sure, the program created with the aim of supporting the "layoff funds" of individual states through loans disbursed directly from Brussels.
The next issue, expected for December, should be around 13 billion euro. This was revealed by Radiocor, explaining that the indication comes (indirectly) from the EU Commission. Brussels has in fact made it known that, according to forecasts, "the total volume expected for 2020 is around 30 billion euros". Taking into account that the first launch on 20 October raised 17 billion euros with 233 billion orders, more than thirteen times the amount offered, it can be seen that the second issue expected in two months' time will be 13 billion.
Budget Commissioner Johannes Hahn indicated that “with this operation the European Commission has made a first step towards a leading role in global debt capital markets. The strong interest of investors and the favorable conditions enjoyed by the placement of the bond are further evidence of the great interest in EU bonds”. According to Hann, Brussels has set the stage for the birth of a European financial “safe asset”. which will strengthen the international role of the euro.
We recall that, in the context of the two tranches that characterized the issue of 20 October, the price of the ten-year bond was set at 3 basis points above the average of the swap rates for purchase and sale (mid-swap rate ), while that of the bond maturing in 2040 was set at 14 basis points above the mid-swap rate. The definitive new issue premiums were estimated at 1 and 2 basis points respectively for the 10-year tranche and for the 20-year tranche; both values are very modest for the volumes placed on the market.
The commissioner then offered further details regarding the audience of global investors interested in anti-vid EU bonds. For both maturities offered on Tuesday, the majority of applications came from fund managers (41% and 46% respectively), followed by central banks and public entities, insurance and pension funds. From a geographical point of view, for the ten-year bond, 20% of requests came from British investors, 17% German, 15% from the Benelux, 12% French, 9% Asian, 8% Nordic, 7% Europe South. For the 20-year bond 24% German, 19% French, 16% British and Benelux, 10% Southern Europe, only 1% Asian.
