Sun. Dec 4th, 2022


(Luxembourg) – The European Stability Mechanism (ESM) raised €2 billion on Monday, completing its 2021 funding needs, with a no-grow tap sale of a 2024 maturity bond. The bond attracted the highest order book in nearly eight years for the ESM and was a record size for three-year paper from the supranational.

The ESM issued €2 billion of the reopened 0% bond maturing on 16 December 2024. The spread was fixed at mid-swaps minus 13 basis points, for a reoffer yield of -0.473%. The new outstanding size of this bond is €4 billion.

The order book was over €18 billion, excluding joint lead manager interest. The only ESM issue with a larger order book, of nearly €21 billion, was its inaugural transaction of five-year bonds on 8 October 2013.

“We felt that the shorter end of the yield curve had been undersupplied this year and investor appetite appeared to show this was the case. We have now completed the combined €24.5 billion funding target for EFSF and ESM,” said Silke Weiss, ESM Head of Funding and Investor Relations.

The joint lead managers for the ESM transaction were: J.P. Morgan, NatWest Markets and Société Générale.

The ESM is rated AAA (S&P, stable)/Aa1 (Moody’s, stable) /AAA (Fitch, stable).

The European Stability Mechanism is the sister borrower and successor to the European Financial Stability Facility (EFSF). The EFSF still issues bonds as part of rollover management of existing loans but cannot provide new loans.

Source – ESM:

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