Successful issuance of the first sovereign sustainability bond in Europe

The issue volume amounts to EUR 1.5 billion

Luxembourg has just successfully issued its first sovereign sustainability bond. Based on the new sustainability bond framework, presented on 2 September 2020, this €1.5 billion bond will contribute to finance and refinance sustainable projects, i.e. of a social and green nature. With a 12-year maturity, the bond bears a negative interest rate of -0.123%.

Luxembourg: the first European state to issue a sustainability bond

The fact that the demand for this bond quickly exceeded the initial offer underlines both the interest that investors have in this new type of product and the confidence that the markets place in the Luxembourg economy. With the successful issuance of this first sustainability bond, Luxembourg, as a key player in the area of sustainable finance, contributes to accelerating the development of this new segment and further consolidates its position as one of the leading financial centres supporting the transition towards the financing of a more sustainable future. The bond will be listed on the Luxembourg Stock Exchange, the world's leading platform for green and sustainable bonds.

BCEE, BIL, BGL BNP Paribas, Société Générale and Deutsche Bank contributed to the transaction as joint lead managers.

Finance Minister Pierre Gramegna comments: 'The huge success of this first issuance of a sovereign sustainability bond by a European country proves that Luxembourg has put in place a credible and comprehensive framework for sustainable finance and underlines the potential of this new category of sovereign bonds, of which Luxembourg is the pioneer. Both the significant excess demand and the very favorable interest rate reflect investor confidence in Luxembourg, one of the few 'AAA' rated countries.'

Press release by the Ministry of Finance

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