EU’s Bond Bonanza Will Reshape the Capital Markets
The European Union is set to challenge Germany’s status as the benchmark borrower in euros.
Shooting for the stars.
Photographer: STR/AFP via Getty Images
The fixed-income landscape is set to be transformed as the European Union revs up to borrow $1 trillion by selling bonds in its own right. While talk of creating a market to rival U.S. Treasuries is overblown, the forthcoming flood of securities will offer investors a genuine alternative to German bunds as the region’s debt benchmark.
The EU will issue as much as 200 billion euros ($240 billion) of bonds each year through 2026 under plans detailed last week, with maturities as long as 30 years. The first debt sale, aimed at funding emergency measures to alleviate the pandemic’s economic wreckage, should be ready by July.