The European Commission has raised €11 billion in its second syndicated bond issuance of 2025, which includes €5 billion in NextGenerationEU (NGEU) Green Bonds, marking a significant step toward funding climate projects and vital policy programs. The bond offering was met with strong investor demand, showcasing the continued appeal of EU-backed securities.
The issuance was split into two parts: a €6 billion tap on a 7-year bond maturing in December 2031 and a €5 billion tap on a 25-year NGEU Green Bond maturing in February 2050. Investor interest was substantial, with the 7-year bond oversubscribed 13 times and the 25-year green bond 14 times, resulting in total bids exceeding €145 billion.
The funds raised will support key EU initiatives, including the NextGenerationEU recovery plan, ongoing assistance to Ukraine, and green investments under Member States’ Recovery and Resilience Plans. These green bonds adhere to the NextGenerationEU Green Bond Framework, which aligns with the Green Bond Principles of the International Capital Market Association (ICMA).
In terms of pricing, the 7-year bond was priced at 99.049%, with a 2.5% coupon, and the 25-year green bond at 98.209%, with a 3.25% coupon. The re-offer yields stood at 2.654% for the shorter bond and 3.357% for the longer maturity.
Joint lead managers for this issuance included Citi, Deutsche Bank, HSBC, Morgan Stanley, and Société Générale. With this latest transaction, the European Commission has now raised €26.5 billion towards its €90 billion target for H1 2025, with further issuances expected in the coming months, including a scheduled EU-Bill auction on February 19, 2025.
This green bond issuance further strengthens the EU’s commitment to addressing climate challenges while securing the necessary funding for its broader economic and geopolitical goals.
