On Thursday 23 February 2023, Luxembourg's Ministry of Finance announced that the State Treasury had successfully placed a bond issue of €3 billion.
The €3 billion bond is made up of two parts: the first tranche of €1.25 billion has a maturity of ten years and a coupon of 3%; the second tranche of €1.75 billion has a maturity of 20 years and a coupon of 3.25%.
With this new sovereign bond, Luxembourg's public debt will amount to approximately €21.9 billion, i.e. 26.4% of its GDP. However, this bond will also be used to pre-finance the repayment of a €2 billion bond, issued in 2013. Upon repayment on 10 July 2023, Luxembourg's debt will decrease to approximately €19.9 billion, i.e. 24% of its GDP. The trajectory provided for in the 2023 budget therefore remains respected, assured the Finance Ministry.
The subscription book for the new bond was opened on the morning of Wednesday 22 February 2023. According to the Finance Ministry, the markets reacted positively, with demand largely in excess of supply (oversubscription).
Banque et Caisse d'Épargne de l'État (BCEE/Spuerkeess), Banque Internationale à Luxembourg (BIL), BGL BNP Paribas, Société Générale and Deutsche Bank contributed to the operation as joint lead managers. The bond will also be listed on the Luxembourg Stock Exchange (LuxSE).
