Rates are falling, and it’s time to take advantage. , also with a 10-year maturity, but with a coupon of 2.875%. Like its predecessor, this issue is intended to bolster the government’s liquidity cushion. On 31 December, the proceeds will be used to repay a bank loan of €1,550,667.92 taken out with Spuerkeess in 2016. The next major repayment date for the Treasury is 28 April 2025. It will then have to disburse €1.5bn to repay a bond issue contracted on 24 April 2020.

When the 2025 budget was presented, finance minister (CSV) indicated that there would be less borrowing over the next few years than had been forecast a year ago. With this issue, public debt stands at €22.5bn, or 27.5% of GDP. The government then expects the debt to fall by €1.8bn in 2025, €2bn in 2026 and €2.2bn in 2027, to reach 26% in 2028. This year, the state will probably have to pay €183m in interest on its borrowings, the minister also told MPs.

A safe haven for financial institutions

The issue was covered in two hours, with demand far outstripping supply. In all, 120 buy orders were issued for a value in excess of €6.1bn. In the end, banks (40% of the total issue), asset managers (27%) and central banks or official institutions (23%), insurers and pension funds (9%) and hedge funds (1%) shared the issue. Geographically, the transaction was well diversified, with Benelux (37%), France (19%), Switzerland (12%), Germany and Austria (9%) accounting for more than three-quarters of the allocation.

“The diversified, high-quality demand testifies to the solid credit quality of the grand duchy of Luxembourg and reaffirms its status as a safe-haven asset,” said the treasury.

This article was originally published in .