Pierre Gramegna, Luxembourg's Minister of Finance;

Luxembourg's Ministry of Finance has announced that the State has just successfully placed a bond issue in order to finance the fight against the COVID-19 (coronavirus) pandemic and help the national economy to overcome this unprecedented crisis.

The €2.5 billion loan consists of two tranches, which is a first for Luxembourg. The average weighted rate of the two tranches is -0.035%, which means that the operation ended with a surplus in favor of the State Treasury. Luxembourg thus continues to benefit from "excellent financial conditions" thanks to its “AAA” rating with the main agencies.

The first tranche, with a volume of €1.5 billion has a maturity of five years and the second, with a volume of €1 billion, a maturity of ten years.

The "subscription book" opened on the morning of Tuesday 21 April 2020. According to the Finance Ministry, the markets reacted positively, with oversubscription following the announcement of the issue on the markets. As a result, the operation was quickly closed. In their efforts to show national solidarity in times of crisis, Luxembourg institutional investors, including in particular the local insurance sector, accounted for almost a quarter of bond loan subscriptions. The other shares were subscribed mainly by renowned investors from the euro zone, the United Kingdom (UK) and Switzerland.

This issue is part of the implementation of the law of 18 April 2020 aimed at setting up a guarantee scheme to support the Luxembourg economy in the context of the COVID-19 pandemic. BCEE, BIL, BGL BNP Paribas, Société Générale and Deutsche Bank contributed to the operation as joint lead managers. The loan will be listed on the Luxembourg Stock Exchange (LuxSE).

Pierre Gramegna, Minister of Finance, commented: "The success of this loan will allow the State to strengthen its liquidity cushion, while guaranteeing the implementation of the measures of the economic stabilisation programme, to face the COVID-19 crisis. Both the large excess demand and the negative interest rate testify to the confidence of investors in Luxembourg, one of the few countries benefiting from an "AAA", and in its capacity to overcome the current crisis in a sustainable manner".