The European Union has, as Americans like to say, been on a journey when it comes to establishing itself as a presence in capital markets.
It is a journey that began on the Rue de la Loi in Brussels, only to hit several roadblocks as far away as New Northside Drive, Atlanta, where US-based ICE Data Indices is headquartered.
It was a hot and humid day in Atlanta when ICE announced in August that it had rejected — for a second time — the idea of labelling EU bonds as sovereign rather than supranational.
Yet, the EU is more than just an ambitious capital markets player. Since its inception with the 1993 Maastricht Treaty it has ridden out many setbacks, not least the eurozone debt crisis from 2009 and the departure of the UK in 2020.
Late came Covid and the engorgement of its funding programme, making it by far and away one of the largest borrowers in the bond market.
They say you have to roll with the punches, and the EU was back up and fighting just this week.
The institution came to the market on Tuesday and priced its final syndicated bond of the year into a market where global stocks were tanking over concerns about US tech valuations.
Yet that volatility proved no problem for the EU as it tightened the spread on the sale by more than usual, paying it lowest new issue premium of the year.
If anything, market participants said a flight to quality had benefitted the EU’s transaction. It highlighted the maturity of the EU as a credit that is highly regarded by investors, they argued.
And not just any investors, but those of the highest quality that saw central banks and official institutions take down 40% of the orders.
With such high quality institutions willing to plough their cash into the EU — some even suggest at the expense of US Treasuries — then the institution looks in great condition as makes its way through another year of jumbo funding levels.