North Rhine-Westphalia’s 2054 Bond: Terms and Current Pricing

A new long-dated bond issued by the German state of North Rhine-Westphalia (NRW) is now trading in the secondary market with a yield to maturity of 4.0447%, based on a clean price of 81.61% of its face value. The security, identified by ISIN DE000NRW0PT4, was originally issued on 9 December 2024 with a total volume of up to €34 million.

The bond carries a fixed annual coupon of 2.963%, payable on 2 December each year, with the next coupon due on 2 December 2026. At the current market price, a buyer acquiring €10,000 in nominal value would pay €8,260.00 for the bond itself (the clean price) plus €201.32 in accrued interest, for a total cash outlay of €8,461.32.

The bond matures on 2 December 2054, giving it just under 29 years of remaining life. Moody’s rates the issuer Aa1, its second-highest credit rating, indicating very high credit quality and investment-grade status.

What This Bond’s Yield Signals for German State Debt

While the coupon is modest, the bond’s discounted price pushes the yield above 4%, making it an interesting data point in the German state bond market. The Aa1 rating signals only a small credit step down from the federal government’s Aaa rating, and the spread over comparable German Bunds is a reflection of sub‑sovereign risk rather than any fundamental concern about NRW’s finances.

Advertisement

The relatively small issuance size (up to €34 million) suggests the bond is aimed at a narrow institutional or specialized investor base, and its liquidity in the secondary market may be limited. Nonetheless, for buy‑and‑hold portfolios seeking high‑grade EUR fixed income with an enhanced yield compared to core government bonds, the bond’s risk‑return profile could be attractive.

For Investors: Yield and Rating Considerations

  • Investors seeking a high‑quality EUR‑denominated bond with a yield above 4% may consider this security, though they should note the small issuance size and potential for limited secondary‑market liquidity. The Aa1 rating supports a very low expected default risk.