, Columnist
Europe's Debt Avalanche Is Just About to Start
The Brussels pandemic bond will be a serious new rival to the Bund as Europe’s sovereign benchmark.
Tentative European recovery needs support.
Photographer: MIGUEL MEDINA/AFPThis article is for subscribers only.
The waiting’s over. The European Union has fired the gun on its multiyear bond issuance to fund the 750 billion-euro ($900 billion) pandemic recovery fund that the bloc agreed last summer.
Tuesday saw the launch of a benchmark 10-year deal and it met a rapturous investor reception. The offering was double what was expected, at 20 billion euros, and offers a yield a few basis points above zero — about 6 or 7 bps. That’s about 30 bps more than equivalent German debt. The order book was for a positively eyewatering 142 billion euros. A big new beast has arrived in the bond market.