European Union to raise 10 billion euros from sale of two bonds

THE European Union is selling more bonds maturing in December 2027 and October 2039 through banks as it seeks to raise the first funds of the fourth quarter. 

The dual-tranche sale is targeting to raise up to 10 billion euros (S$14.3 billion). Early guidance suggests the offerings will price at around 14 basis points over comparable swaps for the three-year security and about 68 basis points over for the 15-year note, according to people familiar with the matter who asked not to be identified. 

Such debt syndications are typically more expensive than auctions, but they allow governments to raise large sums quickly while diversifying their investor base.

Bookrunners on the deal are Barclays, BNP Paribas, Goldman Sachs Group, LBBW and Nordea Bank. A co-lead group comprised Banca Monte dei Paschi di Siena, Danske Bank, Intesa Sanpaolo, KBC Group, Natixis and Banco Santander.

Bloomberg Index Services Limited (BISL) opened a client consultation last week on changes to its fixed income benchmarks, including the potential reclassification of the European Union from a “supranational” to a “treasury” issuer. Intercontinental Exchange and MSCI already rejected such a move in a blow to the bloc’s quest to attract a larger pool of investors. BLOOMBERG