Luxembourg places 2 billion euro bond issue

(CS) Luxembourg returned to the capital markets for a second time this year with a two billion euros institutional benchmark transaction, following a 750 million euro transaction in March this year.

The transaction marked the first time that Luxembourg was active on the capital markets two times in the same year.

Initial investor meetings took place in London and Frankfurt mid-June, and books opened on July 2 at 9am. The transaction received more than two billion euros in orders by 10.45am. By 11am the book stood at a size of 2.4 billion euros.

The final size of the offering was set at two billion euros.

Some 90 investors took part in the transaction, with 36 percent from Germany and Austria, 30 percent from Luxembourg and 13 percent from the Netherlands, as well as further investors from the UK, France other countries in the EU, and the US.

Investors also came from a series of sectors, such as banks (55 percent), asset managers (24 percent), pension/insurance (10 percent), central banks/official institutions (6 percent) and retail/corporate (5 percent).

Joint bookrunners of the transaction were BCEE, BGL BNP Paribas, BIL, Deutsche Bank and HSBC. Meanwhile, the bond is the second to be issued through Securities Settlement System LuxCSD, which is jointly owned by the Luxembourg Central Bank and Clearstream International SA.

The bond will reach maturity on July 10, 2023, paying a coupon of 2.125 percent, Luxembourg's lowest coupon ever, below the 2.25 percent coupon on the last bond issued in March.

The expected issue rating is Aaa (negative) and AAA (stable).

For more information on the 10-year two billion euro bond issue visit gouvernement.lu