The treasury of the Grand Duchy of Luxembourg has just issued and successfully placed another chunk of its sovereign Euro denominated bonds for the total amount of EUR 2,5 billion in order to offer some additional liquidity further to negative effects on the overall macroeconomic situation resulting from the Covid-19 pandemic. The total debt issuance consisted of two tranches with different economic parameters aimed at satisfying the needs and wants of different types of investors – the first tranche of EUR 1,25 billion will mature in seven years and yield to investors 1.375% annually while the second tranche will take two decades to mature with an annual yield of 1.75%.
Although this new debt issuance will inevitably increase the overall Luxembourg’s indebtedness level, the government self-imposed 30% of PIB indebtedness limit will not be breached.
The whole volume of the issued bonds having been already oversubscribed by investors as of 18 May 2022, attractiveness of Luxembourg as a confirmed triple A rated issuer has once again been confirmed.
