On Wednesday 18 May 2022, Luxembourg's State Treasury announced that the Grand Duchy of Luxembourg has placed a bond issue to expand its liquidity cushion in the context of the deterioration of the macroeconomic situation and the measures provided for in the tripartite agreement of 31 March 2022.
The loan of €2.5 billion is made up of two tranches. The first tranche, with a volume of €1.25 billion, has a maturity of seven years and a coupon of 1.375%. The second, with a volume of €1.25 billion, has a maturity of 20 years and a coupon of 1.75%.
The public debt will amount, after this loan, to approximately €19.5 billion, i.e. a ratio of 25.2% of GDP, below the 30% threshold provided for in the government programme.
The subscription book was opened on the morning of 18 May 2022 and the markets reacted positively, with demand largely in excess of supply (oversubscription), which underlines Luxembourg's attractiveness as a sovereign issuer with an AAA rating.
Spuerkeess, BIL, BGL BNP Paribas, Société Générale and Barclays contributed to the operation as joint lead managers. The bond will be listed on the Luxembourg Stock Exchange.