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Brussels, 10 June 2014
EU raises €500 million for Macro-Financial Assistance to Ukraine
The European Commission, on behalf of the European Union, today raised €500 million on the capital markets to fund the first loan tranche for Ukraine under the new Macro-Financial Assistance (MFA II) programme. The funding was raised via a tap of the April-issued EU 10-year €2.6 billion bond, increasing it to €3.2 billion, following an initial tap of €100 million on 14 May. The proceeds of today´s operation will be disbursed to Ukraine on 17 June, the settlement date of the operation.
The new tranche has an issue price of 102.976, and yields 1.545 per cent, which is equivalent to MS +3bps and about 21 bps over the DBR 1.75% Feb-24 bond.
Books were opened at 8.45am CET and closed before 10am, containing orders of more than €1.25 bn. Pricing at MS+3bp was at the tight end of what was expected.
Joint lead managers were Deutsche Bank, J.P. Morgan, Landesbank Baden-Württemberg (LBBW) and Société Générale CIB.
30% of the bonds went to Asia, 60% to the eurozone and 10% to other European countries. From Europe, Germany had the highest allocation with 44% of all the bonds, followed by the Netherlands (8%), France (6%), Switzerland (6%), the UK (4%) and Italy (2%).
In terms of investor type, 30% was allocated to official institutions/central banks, 59% to bank treasuries and 11% to fund managers.
MFA II is supporting Ukraine with loans of up to €1 billion and is implemented in parallel with the already approved programme of €610 million (MFA I), totalling a combined amount of up to €1.61 billion. A first disbursement of €100 million under MFA I was made to Ukraine on 20 May. See IP/14/570.
MFA for Ukraine
The new Macro-Financial Assistance (MFA II) programme is intended to assist Ukraine economically and financially in the current critical stage of its development. It is part of the package to support Ukraine announced by the European Commission on 5 March and endorsed by the European Council on 6 March.
Information on past MFA operations, including annual reports, can be found here:
EU as a borrower
Since January 2011 the EU has raised in total €48.2 bn from the bond market, used mainly for the European Financial Stabilisation Mechanism or EFSM (€46.4 bn) and the remainder for a Balance of Payments loan programme (€1.2 bn) and for Macro-Financial Assistance (€0.6 bn). Under the MFA for Ukraine up to €1.01 bn is still to be funded.
The EU is rated AAA/Aaa/AA+ by Fitch/Moody's/S&P and all rating outlooks are stable. The EU funds its loans by issuing debt instruments in the capital markets. Issuances by the EU are executed by the European Commission's financial operations department located in Luxembourg.
EU investor relations website: