Defence bonds launched by the government on Thursday afternoon reached their €150 million target within hours.
By Thursday evening, Spuerkeess, BGL BNP Paribas and Raiffeisen banks had all sold out of their bonds. The BIL and Banque de Luxembourg confirmed they had sold out on Friday morning.
The three-year bond is designed to help fund national defence and security initiatives, with the interest earned being tax-exempt for residents. The rate is fixed at 2.25%. Minister of Finance Gilles Roth and Minister of Defence Yuriko Backes said the bonds were an interesting and secure investment as they are tax-free. The government will receive around two million euros less in tax, but the money borrowed from investors will be used for targeted national projects in the areas of defence and security.
The bonds will cover around a third of additional defence spending for this year, required in light of geopolitical developments.
The ministers said they would draw up a report soon, and did not rule out future projects in a similar vein to fund areas such as housing or energy transition.
