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The European Commission is empowered by the EU Treaties to borrow from the international capital markets on behalf of the European Union. The EU is a well-established name in debt securities markets, with a strong track record of successful bond issuances over the past 40 years. The Commission presently intends to issue €10 billion in its fifth syndicated transaction.
Background
The Commission is empowered by the EU Treaties to borrow from the international capital markets on behalf of the European Union to finance selected EU policy programs. This includes the NextGenerationEU recovery instrument, financial support programs to Ukraine and other neighborhood countries as well as the EU’s Security Action for Europe, the so-called SAFE instrument, helping the EU member states carry out urgent defence investments through common procurement.
More on the EU funding opportunities, in:
https://www.integrin.dk/2026/04/03/funding-the-eu-27-socio-economic-development-main-borrowing-policy-instruments/
The Commission uses EU-Bonds and EU-Bills as the main funding instruments to raise funds on capital markets. All issuances executed by the Commission are denominated exclusively in euro. Since January 2023, the EU funds its different policy programs by issuing single-branded EU-Bonds rather than bonds for individual programs. The Commission also issues green bonds (under the NextGenerationEU Green Bond label), to finance the green component of the Recovery and Resilience Facility of the NextGenerationEU program.
On the EU funding plan in:
https://ec.europa.eu/newsroom/budget/items/935022/en
The present dual-tranche transaction includes a €6 billion new 7-year EU-Bond, maturing on 12 October 2033, and a €4 billion tap of the 30-year EU-Bond, maturing on 12 October 2055.
Building on the pricing of the March and April syndications against the EU Bond curve, both maturities were again priced against reference points in the EU Bond curve. This approach helped mitigate pricing risks for participating investors and is reflecting the growing liquidity of the EU Bond curve, which can be used as a reliable reference point for the pricing of syndicated issuances when deemed desirable.
This transaction is part of the Commission’s €100 billion funding target for the first half of 2026 (with €77.3 billion issued since January 2026).
Reference to: https://ec.europa.eu/commission/presscorner/detail/en/ip_26_1059
EU’s borrowing methods
The European Commission raises funds using both auctions and syndicated transactions as part of its funding strategy. Auctions allocate EU Bills and Bonds through a competitive bidding process among Primary Dealers, ensuring transparency and cost efficiency. In contrast, syndicated transactions involve a group of Primary Dealers placing bonds directly with investors, allowing for broader investor reach and optimized execution, particularly for large or inaugural deals. The two methods are used in a complementary way to support market access and funding flexibility.
The EU borrowing concept is guaranteed by the EU budget, with contributions to the EU budget an unconditional legal obligation of all EU member states under the EU Treaties.
On 29 April 2026, following the adoption of the relevant legislative procedures for the new Ukraine Support Loan for the period 2026-2027, the European Commission increased its funding target for EU-Bonds for the January to June 2026 period to a total of €100 billion (from the €90 billion indicated in December 2025)
Issuances will be executed under the Unified Funding Approach, whereby the Commission issues single branded EU-Bonds, and internally allocates the proceeds according to the needs of the various policy programs funded through bond issuances. All other elements of the funding plan (including issuance windows) have been communicated in December 2025.
Source: https://commission.europa.eu/strategy-and-policy/eu-budget/eu-borrower-investor-relations/funding-plans_en#latest-funding-plan
Present bond syndication
The EU’s external borrowing is executed using multiple instruments, including EU-Bonds, EU-Bills, and NextGenerationEU Green Bonds. The Commission also makes use of different funding techniques, such as syndications and auctions. The Commission communicates its planned funding volumes to the market through bi-annual funding plans covering the six months of operations.
The European Commission intends to issue €100 billion of long-term EU-Bonds between January and end-June 2026; the six EU-Bonds auctions and six syndicated transactions will take place between January and end-June 2026.
The EU-Bonds will be issued using benchmark maturities from 3 to 30 years, with tap transactions and new lines, using auctions and syndications. The maturities for the new lines will depend on market conditions and the intention to bring liquidity to the curve where needed (with a preliminary focus on 3y, 7y, 10y and 20y). The EU-Bond auctions will continue to be 3-leg auctions complemented by non-competitive offers to EU Primary Dealers the day following the bond auction, allowing for the allocation of additional amounts of auctioned bonds.
More in:
https://commission.europa.eu/strategy-and-policy/eu-budget/eu-borrower-investor-relations/funding-plans_en#latest-funding-plan
The joint lead managers of this transaction were CA-CIB, GS, JPM, NatWest and SG and Commerzbank, DZ, HSBC, Intesa, KBC and Santander acted as co-leads.
There are presently two bond’s techniques:
= First, the 7-year new bond: a €6 billion new EU-Bond due on 12 October 2033: this bond carries a coupon of 3.125% and came at a re-offer yield of 3.232%, equivalent to a price of 99.317%. The spread to the EU-Bond maturing on 13 December 2032 is 9 basis points (bps), which is an equivalent spread to mid-swap of 22.6 bps, and 29.5 bps over the Bund due 15 August 2033 and 19.9 bps below the OAT due 25 May 2033.
The final order book was over €85 billion, with oversubscription rate of approximately 14-times.
= Second, the 30-year bond tap: the €4 billion tap of the EU-Bond due on 12 October 2055: this bond carries a coupon of 4% and came at a re-offer yield of 4.214%, equivalent to a price of 96.406%. The spread to the EU-Bond maturing on 5 October 2054 is 3 bps, which is an equivalent spread to mid-swap of 91.1 bps, and 59.9 bps over the Bund due 15 August 2054 and 32.4 bps below the OAT due 25 May 2055.
The final order book was over €75 billion with an oversubscription rate of approximately 18.7-times.
Information on the allocation on the investors in this transaction in:
https://commission.europa.eu/strategy-and-policy/eu-budget/eu-borrower-investor-relations_en
On Security Action for Europe (SAFE) program
The Security Action for Europe – SAFE program – was adopted by the Council of the European Union in May 2025. The SAFE program is the EU’s new financial instrument designed to provide financial support to the member states to speed up defence readiness by allowing urgent and major investments in support of the European defence industry, with a focus on closing critical capability gaps.
SAFE will provide up to €150 billion in competitively priced, long-maturity loans to the EU member states requesting financial assistance for investments in defence capabilities. These loans will finance urgent and large-scale procurement efforts, ensuring that Europe’s defence industry can deliver the necessary equipment when it is needed most.
SAFE also supports the goals set out by the European Council in March 2025 to increase defence readiness. It is the first pillar of the European Commission’s ReArm Europe Plan/Readiness 2030, which aims to unlock over €800 billion in defence spending across the EU.
Reference to: https://defence-industry-space.ec.europa.eu/eu-defence-industry/safe-security-action-europe_en
More on SURE social bond program
The SURE is the EU program to finance short-term employment schemes across the EU and keep people in jobs during the coronavirus pandemic.
In December 2022, the EU issued its last bond under SURE, raising €6.55 billion through a 15-year social bond. The transaction brought the total funding raised under the program to €98.4 billion, out of a maximum funding envelope of €100 billion (available only until the end of 2022).
All SURE funds were raised through back-to-back issuance of SURE social bonds. This saw the Commission become one of the world’s most significant Environmental, social, and governance (ESG)-label issuers, with SURE social bonds accounting for 16% of global social bond issuance in 2021.
The Commission started issuing social bonds in October 2020, following the adoption of an independently evaluated Social Bond Framework. The framework is compliant with the Social Bond Principles of the International Capital Market Association (ICMA).
The first SURE transaction was record-breaking, attracting an order book of €233 billion, the largest order book for any deal in the history of global bond markets. Between October 2020 and December 2022, the Commission issued a total of €98.4 billion of social bonds in 9 issuances.
https://commission.europa.eu/strategy-and-policy/eu-budget/eu-borrower-investor-relations/sure_en
More information on funding facilities in the following Commission’s websites: = H1 Funding Plan Update – Commission to issue €100 billion in EU-Bonds in the first half of 2026; = Latest EU funding plan; = EU as a borrower website; = EU debt securities data; and = Factsheet on budgetary safeguards protecting investor in EU-Bonds and EU-Bills.
thanks for this