The Luxembourg Stock Exchange commenced secondary trading on 4 December 2008 of a bond issue of the Grand Duchy of Luxembourg for an amount of EUR 2,000,000,000.
This issue is the largest amount ever issued by the Luxembourg state and follows the very successful primary offer period that was mainly addressed to retail investors and carried out between 10 November and 20 November 2008. The bond issue has now been admitted to the official list of the Luxembourg Stock Exchange and is available for secondary trading on its regulated market.
The Luxembourg Stock Exchange welcomes this Luxembourg sovereign bond, which is the first available to both private and institutional investors in 16 years. Listing on the Stock Exchange will allow investors to buy and sell the bonds on exchange. Additionally, because the bonds have been included in the Central Counterparty (CCP) structure used by the Luxembourg Stock Exchange, and which was launched in March 2008, the clearing and settlement of transactions can be carried out efficiently.
The bonds were placed with a face value of EUR 1,000 each and an annual fixed interest rate of 3.75%. They will mature on 4 December 2013. The proceeds of the issue are to be used by the Luxembourg government to finance its bank rescue package. The large majority of investors in the primary offer were Luxembourg residents, who accounted for 72% of the amount issued. Investors in Germany accounted for 16% followed by those in Belgium and Switzerland with 6% and 4% respectively.
The Luxembourg state has an AAA rating.
