The European Union: the future of a bond market behemoth
01/24/25 • 54 min
◆ Riso and Ruhl on the development of the market's biggest new bond issuer
◆ Beyond NextGeneration EU: can the bloc fund defence?
◆ The campaign for sovereign-like borrower status
The European Union is the highest profile bond issuer in the market. In response to the pandemic, it ramped up its borrowing to fund member states' recovery from the disaster, going from raising around €500m a year to around €150bn almost overnight.
As an issuer, it dominates the public sector bond market and in this episode, GlobalCapital asked two of its most important figures, when it comes to its bond market activities, about what lies in store.
We talked about how the issuer's capital markets presence is developing, why it believes it should be classed as a sovereign-style issuer (and the progress it has made), and its possible future funding needs.
Our guests:
Stephanie Riso is the director general of DG Budget within the European Commission — the department responsible for raising and allocating the money the EU needs to implement policy, including from the bond market.
She took over the directorate in March 2023, joining from the cabinet of Commission president, Ursula von der Leyen, where she oversaw the creation of the €800bn NextGenerationEU programme that the EU's bond issues fund.
Siegfried Ruhl is hors classe advisor to DG Budget and a veteran of the public sector bond market. He initially took the post on a short secondment from the European Financial Stability and European Stability Mechanism — the two bond issuing bailout vehicles for EU member states founded during the sovereign debt crisis, which he helped set up.
Over four years later he is still at the heart of developing the EU's capabilities as a bond issuer — a task he is well versed in having not only been there since the start with the EFSF and ESM but also having helped to create Germany's Finanzagentur, the country's debt management office.
◆ Riso and Ruhl on the development of the market's biggest new bond issuer
◆ Beyond NextGeneration EU: can the bloc fund defence?
◆ The campaign for sovereign-like borrower status
The European Union is the highest profile bond issuer in the market. In response to the pandemic, it ramped up its borrowing to fund member states' recovery from the disaster, going from raising around €500m a year to around €150bn almost overnight.
As an issuer, it dominates the public sector bond market and in this episode, GlobalCapital asked two of its most important figures, when it comes to its bond market activities, about what lies in store.
We talked about how the issuer's capital markets presence is developing, why it believes it should be classed as a sovereign-style issuer (and the progress it has made), and its possible future funding needs.
Our guests:
Stephanie Riso is the director general of DG Budget within the European Commission — the department responsible for raising and allocating the money the EU needs to implement policy, including from the bond market.
She took over the directorate in March 2023, joining from the cabinet of Commission president, Ursula von der Leyen, where she oversaw the creation of the €800bn NextGenerationEU programme that the EU's bond issues fund.
Siegfried Ruhl is hors classe advisor to DG Budget and a veteran of the public sector bond market. He initially took the post on a short secondment from the European Financial Stability and European Stability Mechanism — the two bond issuing bailout vehicles for EU member states founded during the sovereign debt crisis, which he helped set up.
Over four years later he is still at the heart of developing the EU's capabilities as a bond issuer — a task he is well versed in having not only been there since the start with the EFSF and ESM but also having helped to create Germany's Finanzagentur, the country's debt management office.
Previous Episode
New recruit joins the SSA market
◆ How the bond market will drive CCMM to provide more climate tech cash
◆ Multilateral development bank hybrid capital — and may have found its niche
◆ Covered bond market roars back to life but will it last?
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The first benchmark-sized publicly sold hybrid since the African Development Bank's deal from about a year ago also surfaced this week. The issuer was the African Finance Corporation. It is, like the AfDB, a multilateral development institution. But it has very different characteristics and these may give a clue as to where MDB hybrid capital deals will succeed in the future.
Finally, covered bond issuance has lagged behind the pace of other parts of the bond market this year but that all changed this week. We examine what the hold up was, why issuers have finally come to the market now, and what could derail the revival.
Next Episode
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