As the President said, we can indeed be happy and proud about the first successful NGEU issuance. However, I would not interpret it as a “Hamiltonian moment”, as many of you called it. I want to be a little bit more modest, concrete and self-confident by rather saying: this is a truly European moment, as it demonstrates the EU's innovation and transformative power.
To understand the significance of this first transaction, let us take a look back:
Slightly more than 12 months ago, the European Commission put forward the ambitious proposal for a reinforced 2021-2027 long-term budget and the NextGenerationEU instrument.
10 and a half months ago, EU leaders approved it during the second longest European Council meeting in history.
In December, our financial package was officially endorsed also by the European Parliament and finally, Member States ratified the Own Resources Decision in a record time of just 5 months!
Let me on this occasion not only highlight the successful cooperation of all EU institutions and Member States but also thank my dedicated team under Director Niall Bohan who set up both SURE and NGEU in a record time.
With the early launch of NGEU we are able to provide Member States, citizens and regions with the much needed money to invest in the future-oriented projects outlined in their Recovery and Resilience Plans already before the end of Summer. In addition, our transactions will provide the necessary funds to reinforce the innovative programmes of the MFF, like the Health programme, the actions dedicated to fight climate change, the R&D programmes and those boosting digitalisation. NGEU is money not to only to repair, but to transform!
Now let me say a few words about today's transaction. We issued a €20 billion of bonds with a maturity of 10 years. Those of you who follow the market will know that this amount is unprecedented.
This is the largest ever issuance from a European public sector institution - national or European. It is the largest ever syndicated single tranche transaction and the largest amount the EU has raised in a single transaction.
The bond was over 7 times oversubscribed, with the order-book running to over €142 billion. We attracted high-quality investors from across Europe and the world. The strong appetite and desire to serve as many loyal and motivated investors as possible, explains why the deal-size was bigger than we had envisaged.
This allowed us to price the bond at very attractive terms. We are paying less than 0.1 % interest.
Both the demand and the price outcome are indicators of an extremely successful transaction. The more challenging market conditions in the past weeks - compared to the start of the SURE issuance - make this success even more significant.
And this is just the beginning. The Commission will carry out two more significant syndicated transactions under NextGenerationEU in the weeks before end-July.
In September, we will start with our EU-Bill and bond auction programme. This will give us additional flexibility in raising NGEU funds on the most advantageous terms. We will review our Funding Plan in September to take stock of the latest information on the disbursement schedule to Member States and to adapt it to the expanded funding tools at our disposal.
Our first green bonds will follow quickly in the autumn, after setting up the NGEU Green Bond framework. The Green Bond issuance will demonstrate how our financial transactions and political priorities are interlinked. The green bond issuances will double the global market for sustainable finance.
By the end of 2021, the Commission expects to raise some €80 billion in bonds, to be complemented by short-term EU-Bills, as per the funding plan published in June 2021. The exact amount of both EU-Bonds and EU-Bills will depend on the precise funding needs, and the Commission will revise its initial assessment in the autumn. In this way, the Commission will be able to fund, over the second half of the year, all planned grants and loans to Member States under the Recovery and Resilience Facility, as well as cover the needs of the EU policies that receive NextGenerationEU funding.
Apart from its substantial contribution to the EU's recovery, the NGEU issuances will establish the EU as a key player on the debt capital markets - issuing liquid, highly rated debt of interest to both domestic and international investors.
In this way, our issuances will also strengthen the international role of the euro. The start of our EU-Bill issuance programme (with 3 and 6 month papers) will be another major milestone in terms of building the EU issuance as a strong reference for international investors looking for euro-denominated exposure and safe European assets.
The good result of today's deal is a vote of confidence in the EU as an issuer and in the EU's capacity to deliver even in an unprecedented crisis such as the current pandemic, for the sake of its citizens.