The European Financial Stability Facility (EFSF) made a strong start to 2026 by raising €7 billion in a dual-tranche bond transaction, completing more than one-third of its long-term funding programme for the year. The deal attracted exceptionally strong demand, highlighting continued investor confidence in high-quality European debt, DKNews.kz reports.
Two tranches, strong global demand
The transaction consisted of two bond tranches:
- €4 billion was raised through a new 10-year bond with a 3.125% coupon, maturing on 1 February 2036. The spread was set at mid-swaps plus 30 basis points, resulting in a reoffer yield of 3.158%. The order book exceeded €35.4 billion, excluding joint lead manager interest.
- An additional €3 billion came from a new 3-year bond with a 2.375% coupon, maturing on 2 February 2029. The spread was fixed at mid-swaps plus 5 basis points, with a reoffer yield of 2.400%. Investor demand topped €16.7 billion.
Broad investor participation
According to Jun Dumolard, Head of Funding and Investor Relations at EFSF/ESM, market conditions have been highly supportive since the beginning of the year.
“The market has been extremely positive since the start of the year, and the first transaction for EFSF was no exception. A dual tranche of a 3-year and 10-year appealed to a wide range of investors, with more than 450 orders from investors worldwide,” he said.
Top-tier banks led the deal
The transaction was jointly managed by Barclays, Deutsche Bank, and Goldman Sachs, reinforcing the strong market reception of the issuance.
High credit quality remains key
EFSF continues to benefit from strong credit ratings:
- Aaa from Moody’s (negative outlook),
- A+ from S&P (stable outlook),
- A+ from Fitch.
The fund is the predecessor and sister borrower of the European Stability Mechanism (ESM). While EFSF no longer provides new loans, it continues to issue bonds as part of its rollover and liability management strategy.
Why it matters
The successful bond sale demonstrates sustained demand for safe, high-quality European issuers, even amid global market uncertainty. For EFSF, the transaction marks a confident and efficient start to its 2026 funding programme – and for investors, it reaffirms trust in Europe’s financial stability framework.
