The Luxembourg government will open subscriptions for a new “Defence Bond” to the general public on Thursday afternoon at 2pm. The three-year bond is designed to help fund national defence and security initiatives, with the interest earned being tax-exempt for residents.
This financial instrument supports the government’s 2025 commitment to raise defence spending to 5% of the country’s Gross National Income (GNI). “It’s a loan you grant to the State, in exchange for which you receive regular interest (coupon) payments and repayment of the principal at maturity”, explains the official government website.
Defence Minister Yuriko Backes and Finance Minister Gilles Roth are scheduled to present further bond details on Thursday, including the applicable interest rate and the specific types of projects slated for funding.
The bond issuance is capped at €150 million. Once this threshold is reached, subscriptions will close. Five major Luxembourg banks – Spuerkeess, BGL BNP Paribas, BIL, Banque de Luxembourg, and Banque Raiffeisen – have been appointed as distribution partners.
All details regarding the “Defence Bond” are available on the dedicated government website.
