Today’s Inaugural 10 And 20 Year Syndications From The EU Under The New SURE Program Saw Record Demand

The bonds in circulation of the institutions dependent on Brussels could be around €1 Tr by end-2021

Konstantin Veit, senior portfolio manager at PIMCO | Today’s inaugural 10 year and 20 year syndications from the European Union under the new SURE program saw record demand from the global investor community, as witnessed by the impressive book sizes in excess of €145 billion EUR for the 10 year and €88 billion EUR for the 20 year bond.

The book building has been reasonably quick, strong demand meant little concession in the process, and related assets such as other Supra issuers also performed well going into the syndication. Also as a result of the strong demand, the EU printed a bit more than originally expected, €10 billion EUR of the 10 year and €7 billion EUR of the 20 year bond.

While the issuer offered same or somewhat higher yield than French government bonds depending on the maturity, that concession quickly traded away in grey market to in line or marginally through France, which doesn’t seem unreasonable. Overall, and as expected, a strong start for the EU’s multi-year mission of becoming the 5th largest Euro area bond over the next decade