In September 2022 the European Commission („EC“) informed on implementation of new issuance method of EC bonds, which will be launched in the second half of 2023. The EC developed the EU Issuance Service (EIS) in co-operation with the European Central Bank (ECB) and the National Bank of Belgium (NBB-CSD) that is a depository with purpose limited to issuance of government and corporate bonds. The EC will issue the bonds through the NBB-CSD and distribute them to the primary market by means of the NBB-CSD’s links to investor depositories established in the EU. Thereby the NBB-CSD will act as the Issuer CSD and a settlement agent. Paying agent services will be provided by the ECB.
The new solution considers requirements of the EC as regards the registration service for securities and their distribution in the European Union, which will be harmonised with procedures of other government issuers and with the European Stabilisation Mechanism; securities will be settled on accounts opened by a central bank, maintained in the TARGET2-Securities.
The EC plans to utilise new arrangements for issuance of debt securities within the SURE and NextGenerationEU programs in value of 100 billion EUR and 806,9 billion EUR respectively, what will make it one of the largest issuers of bond securities denominated in euro.
At the same time, by use of the TARGET2-Securities platform for settlement of the EC bonds, this arrangement will benefit also from the involvement of the Eurosystem, what means that the EC bonds can be used more easily for collateral within the monetary policy operations of the Eurosystem.
In the future the EC can use this new bond issuance method also for other financial programs, e.g. to resolve the energetic crisis.
For further information on EIS you can visit web site of the NBB-CSD:
https://www.nbb.be/en/payments-and-securities/nbb-sss/eu-issuance-service-eis
Author: Dagmar Kopuncová
