First bond sale backing EU stimulus fund looming
(Corrects a typo in the official’s name in paragraph 2)
By Yoruk Bahceli
(Reuters) – The first bond sale to finance the European Union’s coronavirus stimulus fund is expected “imminently,” the European Commission said at an investor meeting on Tuesday.
The EU sent a request to 11 of its primary banks last week asking them to submit proposals for the deal and the deal is expected in the “days to come,” said Niall Bohan, director of the budget branch of the European Commission during the meeting. .
The EU will sell up to € 800 billion of bonds under the program to finance grants and loans to member states, leveraging around € 90 billion of issues supporting the SURE unemployment scheme , a different support program, since last October.
Some 80 billion euros of emissions are expected in 2021.
The EU will establish its green bond framework by September to underpin its issuance in this format, said Christian Engelen, another finance official.
Up to 30% of the stimulus fund’s debt will be issued through green bonds, which fund environmentally friendly spending, in a major boost for the rapidly growing market.
After the first agreement, the EU will sell by the end of July two more bonds via syndication, where a borrower engages investment banks to sell the debt directly to end investors, she said in a program of funding last week.
It will then establish a coupon program for short-term borrowing and begin selling debt through auctions in September, where dealers buy the debt and sell it to investors, the most common way for governments to sell. indebted.
(Report by Yoruk Bahceli, edited by Karin Strohecker and Raissa Kasolowsky)