The European Commission Makes the First Issue of EU SURE Social Bonds

The European Commission proceeded with the inaugural issue of a social bond under the EU SURE instrument, amounting to 17 billion euros, to help maintain people in their jobs. The issue concerned two bonds, one for 10 billion euros due in October 2030 and one for 7 billion euros due in 2040. Investor interest in these high-grade instruments was very strong, and the issue was oversubscribed more than 13 times, resulting in favorable pricing terms for both bonds.
European Commissioner Johannes Hahn, responsible for Budget and Administration, stated: “With this issue, the European Commission has taken a first step towards entering the top tier of global debt capital markets. The strong investor interest and the favorable conditions under which the bond was placed in the market are further proof of the great interest in EU bonds. The ‘social bond’ nature of the issue helped attract investors who wish to help EU member states support employment during these difficult times.”
The terms under which the Commission borrows are directly passed on to the member states receiving the loans.
The raised funds will be channeled to the beneficiary member states in the form of loans, which will help them cover expenses directly related to financing national short-time work schemes and similar measures to address the pandemic.
In this context, the Commission announced earlier this month that all EU SURE bonds it was to issue, up to a maximum of 100 billion euros, would take the form of social bonds and approved an independently evaluated framework for social bonds.