EIB roert zich op valutamarkt (en)

BEI/09/100

08 June 2009

GBP 500m 8-yr issue underlines role as leading Gilt complement

Large size reflects increased demand at longer end and fills gap in the market

The European Investment Bank (‘EIB’) today issued a new 8-year benchmark Sterling transaction. The transaction carries an annual coupon of 4.125% and has a final maturity date of 7 December 2017. The issue not only fills a gap in EIB’s sterling curve but also in the wider market, where, at the time of issuance, there was no current coupon 2017 Gilt available. The bond was priced at a spread of 100bps over the UKT 4% due September 2016.

The issuer had targeted a minimum GBP 250 million size on this transaction and the orderbook grew to GBP 500 million after just 2 hours of bookbuilding. The orderbook is a testament to EIB’s strong following among real money investors in the Sterling market. Banks, insurance companies and fund managers dominated the orderbook, taking about a third of allocations each. UK-based accounts led demand, accounting for 94% of bonds sold.

Composition of demand for the issue:

This bond is EIB’s fifth new public issue in the Sterling market in 2009 alone. New lines this year included a 4-year 2.875% issue, since increased three times to GPB 1,425 million, a 5-year 3.375% issue that has a current outstanding of GBP 1 billion and a

20-year 4.5% GBP 600 million issue. In January, the Bank launched a new GBP 1 billion floating rate note, subsequently increased to GBP 1,185 million.

With this issue, the EIB has issued GBP 5.4 billion in 2009 ytd and the current outstandings of EIB sterling benchmark bonds amount to GBP 43.9 billion.

Lead managers for the transaction were HSBC and RBC Capital Markets.

Comments on the issue:

Barbara Bargagli-Petrucci, Director and Head of Capital Markets at the EIB , said:

“The issue underlines EIB’s role as the leading Gilt complement. The issue filled a gap in the market, given there is currently no current coupon Gilt maturing in 2017, and illustrates a strengthening of longer end demand. The range of orders and large issue size underline the breadth and depth of EIB’s appeal.”

Kerr Finlayson, from HSBC ’s Public Sector Syndicate said: “ Once again EIB has brought the right trade at the right time to the Sterling market. Investors have been looking for longer-dated assets and EIB was able to tap into this demand in good size. Furthermore, execution risk was also minimized by launching and pricing the transaction within one day. ”

Paul Johnson, Managing Director, Head of DCM London at RBC CM said: “ The issue took advantage of current strong demand for AAA spread product from the institutional UK investor base further out the curve. The December 2017 tenor fitted well in EIB's Sterling

yield curve as EIB didn't have any 2017 current coupon bond outstanding. Wider swap spreads on the back of recent comments regarding a possible extension of Quantitative Easing in the UK also provided a favourable backdrop for pricing. ”

Summary Terms and Conditions for the new Bond Issue

Figures and graphics available in PDF and WORD PROCESSED

EIB in the sterling market

The Bank has been an active participant in the sterling market since 1977. It established a position as the leading sterling issuer alongside the UK government, and holds the largest share of the Barclays sterling non-gilt index (currently the EIB has a weighting of 10.3% in the index). Its provision of a comprehensive and liquid yield curve, reaching out to 2054, is indicative of the Bank’s status and strategic approach.

BACKGROUND INFORMATION ON EIB

The European Investment Bank, based in Luxembourg, was set up in 1958 under the Treaty of Rome. Owned by the European Union Member States, the EIB is the EU’s long-term lending institution, financing projects that promote European economic development and integration. Besides supporting projects in the Member States, its main lending priorities include financing investments in future Member States of the EU and EU Partner countries. The EIB operates on a non-profit maximising basis and lends at close to the cost of borrowing. The Bank’s consistent AAA rating is underpinned by firm shareholder support, a strong capital base, exceptional asset quality, conservative risk management and a sound funding strategy. In 2008, EIB raised EUR 60 billion. The annual funding ceiling for 2009 has been set at EUR 70 billion. Year-to-date and with this issue, the Bank has raised around EUR 60.75 billion or 87% of the annual funding programme.